We are removing the NSP short from Investing Ideas today. Below is a brief explanation from our Industrials analyst Jay Van Sciver.
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Insperity (NSP) didn’t handle the miss/guide-down well. With the shares at our initial return expectation, we’ll take the win. The thesis of a reversal in price-cost trends post tax reform has largely played out, at least in guidance, although the profit pressure may persist for a few more quarters. That said, we think individual HRAs could undermine the broader PEO value proposition and plan to monitor adoption closely. |
Since Van Sciver added NSP in March of this year, the shares are down more than 40%, shedding much of their valuation premium, lagging the S&P by more than 50%.