|Written by GSCR Staff|
|Tuesday, 24 September 2013 07:54|
In Monday’s Goldman Guide we discussed the changing job market in the U.S. and the shift to part-time employment. A great article was featured in the Wall Street Journal over the weekend from the CEO of one of the largest temp agencies. This was a must-read.
There is no doubt that the job market has not made a recovery like Wall Street. Obamacare is a main contributor to this, again one of the unintended consequences of ‘good intentions’ from government. Stock plays on this dynamic should pay off for the foreseeable future.
As we mentioned yesterday, Robert Half (NYSE—RHI—$38.37) stands out as a leader in the publicly traded temp agency and job placement firms and stocks.
Robert Half International Inc. provides staffing and risk consulting services in North America, South America, Europe, Asia, and Australia. The Company operates through Accountemps, Robert Half Finance & Accounting, OfficeTeam, Robert Half Technology, Robert Half Management Resources, Robert Half Legal, The Creative Group, and Protiviti divisions. The Accountemps division offers temporary staffing in the accounting, tax, and finance fields. The Robert Half Finance & Accounting division places full-time accounting, financial, tax, and banking personnel.
The shift to temporary employment and the need for placement services will be huge catalysts for the Company going forward, reflected in the 2013 to 2014 earnings per share growth forecast for over 20% increase to $2.12. From a valuation perspective this estimate puts in FY P/E at just over 18, well under the industry standard of 22. The stock appears to be under some major accumulation with almost 1 million shares traded per day over the last three months on a 20% rise in price over that time. Finally, the 5-day, 20-day, and 50-day DMA are all very bullish when analyzing the charts.
RHI is in the right place at the right time as it relates to the U.S. economy and job market. When you add in our current market formula of forward earnings/valuation, momentum, and bullish technical analysis, particularly DMA, the stock is set to take off. We think a price of $50 sometime in 1H2014 is a level RHI will reach.
Have a great day!
Disclosure: Goldman Small Cap Research analysts are neither long nor short these shares but may elect to purchase the stock within the next 48 hours. Goldman Small Cap Research is not affiliated in any way with Goldman Sachs & Co.
This Market Monitor blog was prepared for informational purposes only. Goldman Small Cap Research, (a division of Two Triangle Consulting Group, LLC) produces research via two formats: Goldman Select Research, which typically highlights small cap companies, and Goldman Opportunity Research, which features micro cap companies in a sponsored research format. Thus, the Select product reflects the Firm’s internally generated stock ideas while the Opportunity product reflects sponsored research reports.
Goldman Small Cap Research is not affiliated in any way with Goldman Sachs & Co.
It is important to note that while we may track performance separately, we utilize the same coverage criteria in determining coverage of all stocks in both research formats. Please view the company’s individual disclosures for each engagement, which can be found in each company-specific report. All information contained in this blog, newsletter and in our reports were provided by the Companies or generated from our own due diligence. Our analysts are responsible only to the public, and are paid in advance to eliminate pecuniary interests, retain editorial control, and ensure independence. Analysts are compensated on a per report basis and not on the basis of his/her recommendations.
The information used and statements of fact made have been obtained from sources considered reliable but we neither guarantee nor represent the completeness or accuracy. Goldman Small Cap Research did not make an independent investigation or inquiry as to the accuracy of any information provided by the Company, or other firms. Goldman Small Cap Research relied solely upon information provided by the Company through its filings, press releases, presentations, and through its own internal due diligence for accuracy and completeness. Such information and the opinions expressed are subject to change without notice. A Goldman Small Cap Research blog, report, note, or newsletter is not intended as an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed.
This blog does not take into account the investment objectives, financial situation, or particular needs of any particular person. This blog does not provide all information material to an investor’s decision about whether or not to make any investment. Any discussion of risks in this presentation is not a disclosure of all risks or a complete discussion of the risks mentioned. Neither Goldman Small Cap Research, nor its parent, is registered as a securities broker-dealer or an investment adviser with FINRA or with any state securities regulatory authority.
ALL INFORMATION IN THIS BLOG, REPORT OR NEWSLETTER IS PROVIDED “AS IS” WITHOUT WARRANTIES, EXPRESSED OR IMPLIED, OR REPRESENTATIONS OF ANY KIND. TO THE FULLEST EXTENT PERMISSIBLE UNDER APPLICABLE LAW, TWO TRIANGLE CONSULTING GROUP, LLC WILL NOT BE LIABLE FOR THE QUALITY, ACCURACY, COMPLETENESS, RELIABILITY OR TIMELINESS OF THIS INFORMATION, OR FOR ANY DIRECT, INDIRECT, CONSEQUENTIAL, INCIDENTAL, SPECIAL OR PUNITIVE DAMAGES THAT MAY ARISE OUT OF THE USE OF THIS INFORMATION BY YOU OR ANYONE ELSE (INCLUDING, BUT NOT LIMITED TO, LOST PROFITS, LOSS OF OPPORTUNITIES, TRADING LOSSES, AND DAMAGES THAT MAY RESULT FROM ANY INACCURACY OR INCOMPLETENESS OF THIS INFORMATION). TO THE FULLEST EXTENT PERMITTED BY LAW, TWO TRIANGLE CONSULTING GROUP, LLC WILL NOT BE LIABLE TO YOU OR ANYONE ELSE UNDER ANY TORT, CONTRACT, NEGLIGENCE, STRICT LIABILITY, PRODUCTS LIABILITY, OR OTHER THEORY WITH RESPECT TO THIS PRESENTATION OF INFORMATION.
For more information, visit our Disclaimer: www.goldmanresearch.com