Alliance Data Systems Corp: Growth At A Reasonable Price


Today’s growth stock is Alliance Data Systems Corporation (ADS). The company is a leader in loyalty and marketing campaigns for major retailers. Therefore, you may not know them by name, but it is very likely that you are already doing business with them. Here is a short profile courtesy of Bloomberg:

“Alliance Data Systems Corporation provides data-driven and transaction-based marketing and customer loyalty solutions. The Company offers a portfolio of integrated outsourced marketing solutions, including customer loyalty programs, database marketing services, consulting, analytics and creative services, email marketing and private label and co-branded retail credit cards.”

The following investment thesis courtesy of MorningStar highlights the companies businesses and opportunity:

“Investment Thesis 03/27/2017

We believe Alliance Data Systems will continue to profit from retailers’ interest in private-label rewards programs. Retailers benefit in multiple ways from providing a private-label credit card financed by Alliance Data Systems. When consumers use a private-label card, the merchant bypasses all interchange fees.

Most important, it gives retailers the ability to track their best customers’ purchases and target those customers, a service provided by Alliance’s Epsilon segment. This enables Alliance Data Systems to send highly targeted emails and display ads to a shopper’s mobile device, driving incremental sales. We believe Alliance provides a substantial benefit to its retail partners, which has largely driven its impressive returns and recent growth.”

The following FAST Graph fundamental video analysis highlights the investment opportunity. Few companies have shown the consistent growth that Alliance Data Systems has achieved, and in today’s overvalued market, few companies are as attractively valued.

Disclosure: No position at the time of writing.

Disclaimer: The opinions in this document are for informational and educational purposes only and should not be construed as a recommendation to buy or sell the stocks mentioned or to solicit transactions or clients. Past performance of the companies discussed may not continue and the companies may not achieve the earnings growth as predicted. The information in this document is believed to be accurate, but under no circumstances should a person act upon the information contained within. We do not recommend that anyone act upon any investment information without first consulting an investment advisor as to the suitability of such investments for his specific situation.