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Why the Computershare Limited share price stormed higher today

In morning trade the Computershare Limited (ASX: CPU) share price has continued its strong run and is up 5% to $15.97.

This brings the shareholder, employer, and secretarial services provider’s year-to date return to an impressive 28%.

Why are its shares higher today?

This morning Computershare provided the market with a trading update and increased its full-year profit guidance.

Due to strong contributions from its Corporate Actions and Mortgage Services businesses, the company now expects Management earnings per share to increase by around 10% on FY 2017 in constant currency terms.

Previous guidance had been for earnings growth in the region of 7.5% in constant currency terms.

According to the release, this guidance upgrade assumes that equity markets remain at current levels, interest rate markets remain in line with current market expectations, and that there is a modest improvement in Corporate Actions. Furthermore, the improved outlook assumes no impact from potential tax law changes in the United States.

Should you invest?

Although it comes at a premium to rival Link Administration Holdings Ltd (ASX: LNK), I think Computershare deserves the premium and is a great option for investors even after its strong gain this year.

Whilst I wouldn’t necessarily expect it to smash the market again in 2018 like it has this year, I feel it would be a solid performer and a good addition to most portfolios.

As well as Computershare, I think these top shares would be great options in 2018.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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