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Robert Half International Inc. (RHI), Monster Worldwide, Inc. (MWW): A Look at Staffing Services in a Recuperating Employment Market

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Robert Half International Inc. (NYSE:RHI)

The Internet has changed almost everything, including how we watch movies to how we choose a restaurant. Job searching and head-hunting have been no exception. Nowadays, the Internet is the most practical way to look for a job or an employee, though other channels do remain strong. Monster Worldwide, Inc. (NYSE:MWW), Manpowergroup Inc (NYSE:MAN) and Robert Half International Inc. (NYSE:RHI) are three employment services companies that have, in one way or another, capitalized on the opportunities provided by technological advances. The companies now seem poised to benefit from a recuperating employment market in developed countries and from ameliorating work conditions in emerging economies. Let’s take a closer look at them in order to determine whether they are good investment opportunities.

The employment Monster Worldwide, Inc. (NYSE:MWW)

Monster Worldwide, Inc. (NYSE:MWW) is the leading company in the online employment and recruitment industry. As the employment market recuperates, the company should benefit from its scale and its wide product portfolio, allowing it to capture market share from its peers. Moreover, a restructuring plan has been set in motion to divest under performing market segments like Brazil, Mexico and Turkey. This will shift the company’s focus towards the recovering U.S. market. By centering its attention on its core business, the management intends to improve the company’s cost structure and boost both profitability and cash flow.

Going forward, customer base diversification is expected to be one of Monster Worldwide, Inc. (NYSE:MWW)‘s main growth catalysts. The company usually targeted the large-scale enterprise market. Now, however, it is concentrating its efforts on penetrating the small-to-medium sized business segment and particularly those operating in local and regional markets. Several agreements with media and publishing companies and acquisitions will increase its exposure to these markets. (Zacks) Other investments aimed at widening Monster Worldwide, Inc. (NYSE:MWW)´s product offering should also prove beneficial.

Trading at 10 times its earnings, at about a 78% discount to the industry average and close to the lower end of its historical range, the company has plenty of upside potential. Offering compelling earnings-per-share growth prospects and a strong brand name, this company’s stock looks like a BUY and hold case to me.

Staffing the world

Manpowergroup Inc (NYSE:MAN) provides employment and consulting services in 80 countries. A strong brand name and a wide product offering are two of the firm’s main advantages over its peers. By leveraging its vast network of employers and candidates, it has been able to grow from a staffing company to a full-range human resources management company.

Manpowergroup Inc (NYSE:MAN)‘s global footprint results particularly attractive for multinationals, which can centralize all of their staffing needs through the company. As more companies become transnational, its services should only experience a higher demand. The management has proven successful in creating partnerships with local staffing firms, helping it penetrate new markets without the need for hefty capital investments. Going forward, this strategy should be useful as the company targets the under penetrated Italian, German, Nordic, Indian and Chinese markets.

Another one of the main growth catalysts for the company in the long-term should rest in its U.S. professional staffing business. This business is expected to grow faster than most other sectors.

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