5-Star Stocks Poised to Pop: Paychex

Based on the aggregated intelligence of more than 115,000 investors participating in Motley Fool CAPS, the Fool's free investing community, payroll and personnel service provider Paychex (Nasdaq: PAYX) has earned a coveted five-star ranking. Our data has shown that five-star stocks outperform the market by a significant margin; conversely, one-star stocks have woefully lagged the market average.

With that in mind, let's take a closer look at Paychex's business, and see what CAPS investors are saying about the stock right now.

Paychex facts

Headquarters	Rochester, N.Y. (1971)
Market Cap	$11.4 billion
Industry	Staffing and Outsourcing Services
TTM Revenue	$2.09 billion
Management	CEO Jonathan Judge (since 2004) CFO John Morphy (since 1995)
TTM Return on Equity	33.8%
Competitors	Automatic Data Processing (NYSE: ADP), Administaff (NYSE: ASF)
CAPS members bullish on PAYX also bullish on	Apple (Nasdaq: AAPL), Bank of America (NYSE: BAC)
CAPS members bearish on PAYX also bearish on	Citigroup (NYSE: C), General Motors (NYSE: GM)

Sources: Capital IQ, a division of Standard & Poor's, and Motley Fool CAPS. TTM = trailing 12 months.

Over on CAPS, fully 204 of the 212 All-Star members who have rated Paychex -- some 96% -- believe the stock will outperform the S&P 500 going forward. These All-Star bulls include SARdMc and nemaline, both of whom are ranked in the top 10% of our community.

In July, SARdMc noted that Paychex "is a leader in a niche market servicing small to mid-size companies of < 20 employees. ... The company has good management, no debt and an attractive dividend. A recession may slow growth in the near-term but the long-term prospects should be favorable."

A more recent pitch from nemaline late last month follows that line of reasoning, writing:

It is unlikely that the recession will result in prolonged job losses, particularly at midsize companies. Needless to say, when the economy recovers, Paychex will still be around helping midsize and some small businesses with payroll. Given they have a consistently solid business and history of dividend payments and raises, this is a great company to be part owner of. Look back to 2000 to find prices like these. May even get better...

What do you think about Paychex, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. More than 115,000 investors are waiting to hear what you have to say. CAPS is 100% free, so simply click here to get started.