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Is Monster Worldwide, Inc. (MWW) Cheap Now?

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Monster Worldwide, Inc. (NYSE:MWW) has been losing its popularity in the recruitment industry, due to the sudden emergence of social networking sites LinkedIn Corp (NYSE:LNKD) and Facebook Inc (NASDAQ:FB). Consequently, Monster Worldwide, Inc. (NYSE:MWW) has seen its share price drop significantly, from $25 per share at the beginning of 2011 to only $5.50 per share today. At the beginning of May, the company said that if it could not sell itself, it would buy back its shares. Is Monster Worldwide a buy now? Let’s find out.

Monster Worldwide, Inc. (NYSE:MWW)

Business snapshot

Monster Worldwide, Inc. (NYSE:MWW) describes itself as a global leader in the recruitment industry, with the presence in more than 40 countries, operating in three main business segments: Careers-North America, Careers-International and Internet Advertising & Fees. Most of its revenue, $463 million, or 52% of the total 2012 revenue, were generated from Careers-North America segment while the Careers-International segment’s revenue was $351.1 million. In 2012, Monster Worldwide, Inc. (NYSE:MWW) produced a significant loss of nearly $259 million on the total revenue of $890.4 million. The significant loss was mainly due to a $262.7 million in goodwill impairment charge of Careers-China.

What I like about Monster Worldwide, Inc. (NYSE:MWW) is its conservative capital structure. As of March 2013, it had $851 million in equity, $131 million in cash and only $170 million in debt. However, because the company has grown via acquisitions, its goodwill amount was quite high, at $881 million. Thus, the tangible book value was negative at $(30) million. At $5.50 per share, Monster Worldwide is worth nearly $645 million. The market values the company at 0.73 times its sales and 12.5 times its forward earnings.

LinkedIn and Facebook – two huge social networking sites

As mentioned above, employees and employers have been turning to LinkedIn and even Facebook for employment opportunities. Many employers are using both LinkedIn Corp (NYSE:LNKD) and Facebook to advertise their career opportunities and to target selected potential employees. LinkedIn currently has as much as 200 million members in more than 200 countries. Thus, with $18.50 billion in total market cap, each LinkedIn user is worth $92.50 on the market. Most of its revenue, $523.6 million, or 53.8% of the total 2012 revenue, was generated from Talent Solutions, while the Marketing Solutions contributed only half of that, at $258.3 million in sales.

For the full year 2013, LinkedIn Corp (NYSE:LNKD) expected to generate around $1.43 to $1.46 billion. The adjusted EBITDA might come in the range of $330 – $345 million. In order to boost its potential Talent Solutions, Marketing Solutions and Premium Subscription revenue in a long run, LinkedIn has been trying to tap into the mobile space. In the middle of April, LinkedIn announced the acquisition of Pulse for around $90 million, one of the leading newsreader and mobile content distribution platform. For around three years in operations, Pulse has around 30 million users in more than 190 countries globally.

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