Paychex (PAYX)

Model price is 63.70 so it is 12% overvalued. When it comes back to the model price he would be a buyer.

Similar to ADP who is focused on the small and medium sized companies. When the economy is really strong this company will do well. His concern is that the economy may be at peak capacity, with unemployment less than 4% -- how many more paycheques can they write? This is also outside the seasonal peak for the sector. Technically, it needs to hold key support near these levels.

This company had a great run in 2017, but recently has failed to perform. Price is two times growth in the P/E (i.e. the P/E is around 20, while growth is about 10%) – this is expensive. Keep it on your radar.

Just made an acquisition in Europe where they are growing to become more international. It's a cash cow--they bankroll payroll deductions before IRS payments so they make the interest. 3.3% dividend yield. Stock fell way too fast, so here's an opportunity. (Analysts' price target $65.02)

They can benefit from the Trump tax breaks. This is number 2 and cater to the medium to small businesses. This is in the sweet spot for American growth. Great margins, 40% plus ROE and a 3% yield that they keep raising. (Analysts’ target: $69.35).

A payroll processing company. They typically focus on the smaller portions of the economy, small/medium size companies. This is a good Buy for a long-term hold. People who have owned this for a long period of time have done very well. Has a very strong balance sheet. Because companies have to pay employees in advance, they carry a float, and that float will earn increasingly higher returns with higher interest rates. It raises its dividend's very consistently. At this point, it is a little rich.

(A Top Pick March 13/17. Up 12.73%.) A play on rising interest rates. For every quarter percent interest rates rise, this company, because they are a payroll processor, get to bank $4 billion of other people's money over the weekend, before remitting it to the payroll taxes. Because they were paying the top tax rate of 35%, and it has dropped to 21%, there may be a 50%-100% increase in the dividend in September.

(A Top Pick March 13/17. Up 10%.) Basically does HR and payroll services. Every 2 weeks, when all these little companies have to remit their IRS payroll taxes, this company gets to grab $4 billion and park it over the weekend at rising interest rates. For every .25% interest rates rise in the US, this company makes free money of $3 million. They are catering to small-medium-sized businesses of 15 employees or less, so their business is picking up, revenues are growing and with tax cuts from 35% to 21%, it is going to release a lot of cash flow with an increasing dividend that could be as high as 50%.

(A Top Pick Aug 25/16. Up 1.4%.) On the interest rate rise, they made $3 million off the tax remittances which is about $4 billion every 2 weeks. Small businesses are usually the engine for the US growth and the economy. They have no debt and lots of cash flow. Dividend has been growing at roughly a 7%-10% clip.