Professional staffing firms are benefiting from both increased demand for temporary staffing services and the transition toward a more permanent work force, collecting fees from servicing both needs, says Macquarie Group Analyst Kevin D. McVeigh, CPA.
“These stocks tend to recover earlier than the economy and then enjoy the additional boost as we enter the midcycle of the economy,” McVeigh said. “When the economy is on firmer ground and employers become more confident in the employment outlook, they convert some of those temporary employees to full time.”
McVeigh points to Robert Half International (RHI) as one of his top picks in professional staffing. RHI offers high-end professional staffing services, which tends to do well at this stage of the recovery cycle. McVeigh says he expects 25% to 30% upside from the company’s stock.
“[Robert Half International is] well positioned among small and medium-size clients, so as that part of the market continues to return to growth, we think they are very well positioned to capture additional revenue associated with that growth,” McVeigh said. “They also enjoy good pricing power relative to some of their peers.”
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