In my March 28 Automatic Data Processing (ADP) Is Overvalued guest post at Dividend Power, I lay out my rationale for not wanting to add to my current exposure.
I have no idea how ADP's share price will behave in the very short term. I am, however, reasonably confident its share price will be higher a decade from now. Nevertheless, I try to acquire undervalued shares with the objective of being able to generate a double digit annual rate of return over several years. I must pay attention to share valuation otherwise the odds diminish that I can generate this rate of return.
I have been an ADP shareholder for ~2 decades and it was my 17th largest holding when I completed my 2023 Year End FFJ Portfolio Review. My plan is to add to my exposure when appropriate. At the moment, however, I think ADP is overvalued and it is not sufficiently attractive and I will bide my time.
I wish you much success on your journey to financial freedom!
Note: Please send any feedback, corrections, or questions to [email protected].
Disclosure: I am long ADP.
Disclaimer: I do not know your circumstances and do not provide individualized advice or recommendations. I encourage you to make investment decisions by conducting your research and due diligence. Consult your financial advisor about your specific situation. I wrote this article myself and it expresses my own opinions. I do not receive compensation for it and have no business relationship with any company mentioned in this article.
