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Obama, and the Skilled Labor Super Bull: Workday Inc (WDAY)

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With the State of the Union officially in our “rear view,” many political jabs will be firing from both sides of the aisle.

I have no political diatribe forthcoming–I just want you to make money.

But taking an objective look at political policy that is “sensitive” and complex like “Obamacare,” can sometimes point the average investor to opportunities the market is just too emotional to capitalize on. It’s like Jim Cramer always says: “there’s always a bull market somewhere,” I like that; it’s a reminder that every policy creates investment winners and losers.

Workday Inc (NYSE:WDAY)

Obamacare creates a hidden bull market

For the past four years, labor market trends have encouraged droves of disengaged workers to stay in positions they despise.

But that “glacier” of employment uncertainty is thawing. In fact in 2012 41% of employers (up 7% since 2010) reported an inability to fill open positions.

At the same time, 30% of workers say they’d retire early (up 9% since 2010) if they didn’t need benefits.

So what happens when the Affordable Care Act (Obamacare) goes full throttle in 2014? I’d bet that more people will be quitting or retiring; and there’s a bull market beneath it all.

Remember, prior to the “great recession” some estimates predicted a skilled labor decrease of up to 50% in the workforce. The reason for the shortage is due to “baby boomer” retirements and a general decline in trained workforces.

The truth is that we’re at the dawn of a skilled labor shortage and Obamacare is set to create a hidden “Super Bull” in this space.

Winners of the “Skilled Labor Super Bull”

Workday Inc (NYSE:WDAY)

This company launched its IPO just last month and is not currently making a profit, but it’s very interesting as a “speculative play.”  Workday provides a single point “software as a service” platform that allows employers to manage everything from recruitment outsourcing services to income statements.

Even better, Workday allows you to optimize your workforce.

You can determine how well a top employee is paid vs. their “market comparison;” all on your iPad, all on the cloud. Or, you can examine the revenue generated per employee for a specific business line and assign and re-structure your headcount for that business line. While the company won’t earn a profit for at least a year, it’s on the right side of this trend and with a market cap of just around $8B, it could be a great acquisition play as well.

Korn/Ferry International (NYSE:KFY)

Simply put, Korn/Ferry is to “skilled talent search” what McDonald’s Corporation (NYSE:MCD) is to hamburgers. In a sector that is fragmented by hundreds of small players, they are the only global “direct hire” search firm. Until lately, direct hire was all Korn/Ferry did but now they dabble in some complimentary employee performance consulting services as well.

Let’s see if you can spot the trend that binds Korn/Ferry’s business lines:

Direct hire search: Skilled headhunters “cold call” executive level talent in competitive fields like finance, technology and advertising. These exec’s typically are gainfully employed and in demand, yet you only pay Korn/Ferry if you make a hire (the fee is substantial.)

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