DICE HOLDINGS, INC. (NYSE:DHX), a niche online job-board operator, is an arch rival of Monster Worldwide, Inc. (NYSE:MWW). Although lesser known and far smaller, with just 534 employees as compared to Monster Worldwide, Inc. (NYSE:MWW)'s 5,000, DICE HOLDINGS, INC. (NYSE:DHX) is beginning to distance itself from its larger rival based on financial and operating disciplines. Here are three reasons Dice's undervalued business is outperforming and why its share price should hit new 52-week highs over the remainder of fiscal 2013.
1. Maxing out operating and profit margins
DICE HOLDINGS, INC. (NYSE:DHX) is currently posting metrics that leave many of its publicly traded competitors in its wake. The company's profit margin for the trailing twelve months (ttm) ended Dec. 31, 2012 was 19.50%. Its operating margin was 30.17% in the same period, with a trailing P/E of 17.32.
Monster Worldwide, Inc. (NYSE:MWW) Worldwide is significantly under-performing, with a declining profit margin of -29.06%, an operating margin of just 8.14%, and a non-existent trailing P/E ratio. Monster Worldwide, Inc. (NYSE:MWW) recently launched a Facebook application called "BeKnown" but with just 100,000 or so users, the portal has yet to find traction. Privately held Glass Door, in contrast, offers a similar application but has more than 1 million Facebook users.
Networking website LinkedIn Corp (NYSE:LNKD), founded by serial Internet entrepreneur Reid Hoffman, is beginning to muscle its way into the job-board and talent-solution arena. In the fourth quarter, LinkedIn Corp (NYSE:LNKD) reported that revenue in "talent solutions" products increased 90% versus the same period in 2011. Despite these gains, LinkedIn Corp (NYSE:LNKD) still trails DICE HOLDINGS, INC. (NYSE:DHX) in the overall health of its business, with with an astounding trailing P/E of 945.21, a paltry profit margin of 2.22% and operating margin of 5.85%.
2. Energy, health and technology segments are soaring
Dice, unlike Monster Worldwide, Inc. (NYSE:MWW) and LinkedIn Corp (NYSE:LNKD), publishes specialized websites for select industries rather than manage a single career website for all job seekers. This divide-and-conquer strategy continues to make sense, as Dice is experiencing solid gains in its technology segment while its energy and health care verticals also showing strength.
For the fourth quarter, DICE HOLDINGS, INC. (NYSE:DHX)'s "tech and clearance" segments increased 19% year-over-year (y-o-y) to $37.1 million, which represents 70% of Dice's consolidated revenues. Last year, Dice acquired Slashdot Media (which includes sub-brands Slashdot, SourceForge and Freecode) and added the brand to its roster of technology job sites. This added $4.7 million to the segment's quarterly revenues.