Barclays on U.S. Business & Professional Services: Stronger Payrolls A Positive for Staffers
Tweet
Share
E-mailGet Alerts MAN Hot Sheet
Price: $61.45 +1.17%
Rating Summary:
7 Buy, 12 Hold, 1 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 8 | Down: 6 | New: 26
Rating Summary:
7 Buy, 12 Hold, 1 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 8 | Down: 6 | New: 26
Join SI Premium – FREE
Barclays on U.S. Business & Professional Services: Stronger Payrolls A Positive for Staffers
Barclays analyst says, "We have received several investor questions in recent days and weeks about the staffing stocks' ability to outperform the market in 2011, especially given a strong last 6-8 months and a recent competitor downgrade. In particular, there seems to be concern in the marketplace regarding the potential for temporary staffing in an environment in which permanent hiring accelerates, as many (including us) believe will occur in 2011."
"Our view remains that the staffing stocks are well positioned to outperform in 2011, and should benefit from a more robust permanent hiring environment, in addition to continued healthy temp demand growth. We cite three reasons for our view: Historically, temp penetration (temp jobs as % of total nonfarm payrolls) has continued to expand throughout the majority of the employment up-cycles following the 1990 and 2001 recessions; Permanent Placement is the highest margin business for the staffers, with 100% gross margins and operating margins that can be as much as 2x-4x that of temp staffing; and The staffers have handily outperformed the market in the 2nd year of employment upcycles following both of the last two recessions."
"We remain bullish on the staffing industry, and continue to recommend ManPower (NYSE: MAN), Robert Half (NYSE: RHI) and Resources Connection (Nasdaq: RECN) as Overweight rated stocks. We see more upside potential in MAN and RHI, which remain our top picks overall and within our Business & Professional Services coverage universe, and also find RECN a good idea for small cap investors."
Barclays analyst says, "We have received several investor questions in recent days and weeks about the staffing stocks' ability to outperform the market in 2011, especially given a strong last 6-8 months and a recent competitor downgrade. In particular, there seems to be concern in the marketplace regarding the potential for temporary staffing in an environment in which permanent hiring accelerates, as many (including us) believe will occur in 2011."
"Our view remains that the staffing stocks are well positioned to outperform in 2011, and should benefit from a more robust permanent hiring environment, in addition to continued healthy temp demand growth. We cite three reasons for our view: Historically, temp penetration (temp jobs as % of total nonfarm payrolls) has continued to expand throughout the majority of the employment up-cycles following the 1990 and 2001 recessions; Permanent Placement is the highest margin business for the staffers, with 100% gross margins and operating margins that can be as much as 2x-4x that of temp staffing; and The staffers have handily outperformed the market in the 2nd year of employment upcycles following both of the last two recessions."
"We remain bullish on the staffing industry, and continue to recommend ManPower (NYSE: MAN), Robert Half (NYSE: RHI) and Resources Connection (Nasdaq: RECN) as Overweight rated stocks. We see more upside potential in MAN and RHI, which remain our top picks overall and within our Business & Professional Services coverage universe, and also find RECN a good idea for small cap investors."
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Emkay Global Starts Urban Company (URBANCO:IN) at Buy (1)
- Goldman Sachs Downgrades AAC Technologies Holdings Inc. (2018:HK) (AACAY) to Neutral
- UBS Downgrades Converge ICT Solutions Inc (CNVRG:PM) to Neutral
Create E-mail Alert Related Categories
Analyst CommentsRelated Entities
Nonfarm Payrolls, BarclaysSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
