In this article we will take a look at some of the best staffing company stocks to buy now.
The 2022 stock market crash, rising inflation and the Federal Reserve’s flurry of rate hikes are forcing companies to announce massive layoffs to cut costs. As employers cut back on spending, staffing and HR-related services companies were affected. But there’s another side to this picture. Amid layoffs, more and more individuals sign up for workforce and job hunting platforms to find new jobs, ultimately helping staffing companies. Data also shows that a major chunk of the laid off workforce are able to find new jobs pretty soon. Jobs platform company ZipRecruiter recently conducted a survey to see the state of the employees who were laid off between December and January. The survey included about 2,000 people. Results show that almost half of the surveyed individuals are working in new jobs, while another quarter said they already have new job offers in hand.
The survey said that people from advertising, auto and transportation sectors were most likely to have received job offers after getting laid off.
While major technology companies made headlines earlier this year with huge layoffs, there are companies that are continuing to hire more and more workers. For example, Boeing plans to hire 10,000 workers this year. Chipotle also plans to hire about 15,000 workers. Hiring in industries that were devastated by the pandemic and are in recovery mode remains strong. These areas include restaurants, airlines and hotels.
Analysts also believe that once inflation gets under control and the Federal Reserve begins to pause and eventually cut interest rates, companies across the board will hire again, which could help staffing and HR platforms.
More and more young people are turning to digital staffing platforms to find jobs, upskill themselves and network. The biggest example is Microsoft Corp (NASDAQ:MSFT)’s LinkedIn, where growth and engagement are making new records. Microsoft Corp’s CEO Satya Nadella said the following about LinkedIn during the company’s latest earnings call:
People and companies continue to look to LinkedIn to connect, learn, sell and get hired. We once again saw record engagement among our more than 900 million members.
Three members are signing up every second. Over 80% of these members are from outside the United States. And as the members come to the platform to find and share professional knowledge and expertise, newsletter creation was up 10x year-over-year. Skills are the new currency and people are increasingly investing in their skill-building to keep up with their changing roles in industries. We offer more than 20,000 courses in 11 languages and companies are also turning to a skills-based approach in place of degree or pedigree to identify qualified talent, with more than 45% of the hires on LinkedIn explicitly using skills data to fill their roles. Finally, LinkedIn Marketing Solutions continues to be a leader in B2B digital advertising, helping companies deliver the right message to the right audience on a safe and trusted platform.
Methodology
For this article, we scanned Insider Monkey’s database of 943 hedge funds and their holdings and picked top 12 companies that offer staffing, HR, workforce, payroll and related solutions and services. The list is ranked in ascending order of the number of hedge fund investors. Some notable HR and staffing stocks include Microsoft Corp, Workday Inc (NASDAQ:WDAY) and Automatic Data Processing Inc (NASDAQ:ADP).
12. Kelly Services, Inc. Class A (NASDAQ:KELYA)
Number of Hedge Fund Investors: 12
Staffing and employment services company Kelly Services, Inc. Class A earlier this month launched Kelly Fusion Digital Workers, the first product in its suite of solutions that allow people to automate routine tasks and focus on “meaningful work,” according to the company’s press release.
In February, Kelly Services, Inc. Class A declared a quarterly dividend of $0.075 per share. Forward dividend yield at the time came in at 1.6%.
A total of 12 hedge funds tracked by Insider Monkey were bullish on Kelly Services, Inc. Class A as of the end of the last quarter of 2022. The biggest hedge fund stakeholder of Kelly Services, Inc. Class A during this period was Cliff Asness’ AQR Capital Management which owns a $5.11 million stake in the company.
11. Trueblue Inc (NYSE:TBI)
Number of Hedge Fund Investors: 12
Workforce solutions company Trueblue Inc ranks 11th in our list of the best staffing stocks to buy according to hedge funds. In February, the company posted its Q4 results which were lower than estimates.
GAAP EPS in the quarter came in at $0.21, missing estimates by $0.07. Revenue in the quarter fell 10.3% year over year to $558 million, missing estimates by $4.93 million. For the full year Trueblue Inc’s revenue totaled $2.3 billion, which showed a 4% increase from the revenue posted in 2021.
A total of 12 hedge funds tracked by Insider Monkey had stakes in Trueblue Inc as of the end of the fourth quarter of 2022. Richard S. Pzena’s Pzena Investment Management had the biggest stake in Trueblue Inc, worth $43 million.
10. Paycor HCM Inc (NASDAQ:PYCR)
Number of Hedge Fund Investors: 15
Payroll solutions company Paycor HCM Inc in February posted its fiscal second quarter results. GAAP EPS in the period came in at -$0.16, missing estimates by $0.07. Revenue in the period increased by about 28.9% year over year to total $132.9 million, beating estimates by $5.56 million. Operating loss in the quarter came in at $31.6 million, compared to $33.8 million for the second quarter of fiscal year 2022.
As of the end of the fourth quarter of 2022, 15 hedge funds tracked by Insider Monkey held stakes in Paycor HCM Inc. The net worth of these stakes was $65 million. The biggest stakeholder of Paycor HCM Inc is Paul Marshall and Ian Wace’s Marshall Wace LLP which owns a $20 million stake in the company.
9. Ziprecruiter Inc (NYSE:ZIP)
Number of Hedge Fund Investors: 18
Ziprecruiter Inc is known for its jobs platform that connects employers and job seekers. Ziprecruiter Inc got hammered after the company gave soft guidance for the first quarter of 2023 and full year. Ziprecruiter Inc said employers have “moderated” their hiring plans and “reduced their recruitment budgets in the first weeks of this year.” During the fourth quarter, Ziprecruiter Inc’s revenue came in at $210.5 million, beating estimates by $4.66 million.
Insider Monkey’s database of 943 hedge funds shows that 18 hedge funds were bullish on the stock at the end of the fourth quarter of 2022, up from 16 hedge funds in the previous quarter. The most significant shareholder of Ziprecruiter Inc during this period was D. E. Shaw’s D E Shaw which owns an $11 million stake in the company.
8. ManpowerGroup Inc (NYSE:MAN)
Number of Hedge Fund Investors: 20
Wisconsin-based recruitment services provider ManpowerGroup Inc ranks 8th in our list of the best staffing stocks to buy now. In January, ManpowerGroup Inc posted its Q4 results.
GAAP EPS in the quarter came in at $0.95, missing estimates by $1.13. Revenue in the quarter fell 10.6% on a year-over-year basis to total $4.81 billion, beating estimates by $60 million. ManpowerGroup Inc is also a dividend payer. ManpowerGroup Inc has a dividend yield of over 3.4% as of April 13.
Insider Monkey’s proprietary database of 943 hedge funds shows that 20 hedge funds had stakes in ManpowerGroup Inc as of the end of the fourth quarter of 2022. The total worth of these stakes was $171 million. The biggest hedge fund stakeholder of the company is Harris Associates.
7. Robert Half International Inc (NYSE:RHI)
Number of Hedge Fund Investors: 21
Robert Half International Inc provides talent solutions, HR and staffing-related consulting services. Despite the broader market downturn, Robert Half International Inc in February increased its quarterly dividend by 11.6%. Robert Half International Inc’s board also authorized a share repurchase program of up to an additional 10 million shares.
Robert Half International Inc’s Q4 GAAP EPS came in at $1.37, meeting analyst estimates. Revenue in the period fell 2.8% YoY to $1.7 billion, missing estimates by $30 million.
As of the end of the fourth quarter of 2022, 21 hedge funds tracked by Insider Monkey held stakes in Robert Half International Inc. The biggest stakeholder of the company was Cliff Asness’s AQR Capital Management which owns a $122 million stake in Robert Half International Inc.
Like Microsoft Corp, Workday Inc and Automatic Data Processing Inc, RHI is one of the favorite staffing company stocks of hedge funds.
6. Insperity Inc (NYSE:NSP)
Number of Hedge Fund Investors: 21
Texas-based HR solutions company Insperity Inc has been a strong performer this year as the company’s shares have gained about 8% year to date through April 13.
In February, UBS shared a list of stocks that it believes were “de-risked” from earnings. Insperity Inc was one of these stocks. UBS said its screen of stocks included companies with low accruals that have better OCF versus earnings and have had a “greater decline in fwd P/E and stronger 3mo earnings revisions (combined 40%ile).”
A total of 21 hedge funds out of the 943 hedge funds tracked by Insider Monkey had stakes in Insperity Inc as of the end of the fourth quarter of 2022.
Like Microsoft Corp, Workday Inc and Automatic Data Processing Inc, NSP is one of the best staffing company stocks to buy now.
5. Paychex, Inc. (NASDAQ:PAYX)
Number of Hedge Fund Investors: 47
New York-based Paychex, Inc. provides payroll and HR-related services. In March, Paychex, Inc. posted strong fiscal Q3 results. Adjusted EPS in the quarter came in at $1.29, beating estimates by $0.05. Revenue in the quarter jumped 7.8% year over year to reach $1.38 billion, beating estimates by $30 million.
For 2023, the company expects its Management Solutions segment revenue to increase by 8%.
The stock is also a solid dividend payer. In February, UBS shared a list of stocks picked up by its machine learning model. PAYX made it to the list. UBS said these stocks offer “greater downside protection, have stronger pricing power, trade at a 15-20% valuation discount vs the market and the payout ratio (45%) is 5 ppts below average implying upside to dividend growth.”
As of the end of the fourth quarter of 2022, 47 hedge funds tracked by Insider Monkey had stakes in the company.
4. Paycom Software Inc (NYSE:PAYC)
Number of Hedge Fund Investors: 47
Oklahoma-based payroll and HR company Paycom in March received a Buy rating from D.A Davidson. The firm’s analyst Robert Simmons said that he sees limited downside to the stock and also finds the stock’s valuation “inviting.”
Another bullish call for the stock came from Goldman Sachs, which included the stock in its list of high-margin growth stocks which the firm is recommending investors to buy versus low-margin growth stocks.
As of the end of the fourth quarter of 2022, 47 hedge funds tracked by Insider Monkey had stakes in the company.
3. Automatic Data Processing Inc
Number of Hedge Fund Investors: 49
HR-related software and services company Automatic Data Processing ranks 3rd in our list of the best staffing stocks to buy now. Perhaps the biggest reason to like the stock amid the current broader market turmoil is its riveting dividend history. The company has upped its dividend for about five decades now. BofA in March shared its screen of “sleep at night” stocks and ADP was one of these stocks. The stock was categorized under the “consistent dividend growers screen.”
As of the end of the fourth quarter of 2022, 49 hedge funds tracked by Insider Monkey had stakes in the company. The total value of these stakes was $3.5 billion. The biggest stakeholder of the company was Terry Smith’s Fundsmith LLP which owns a $1.3 billion stake in the company.
2. Workday Inc
Number of Hedge Fund Investors: 83
Workday’s Cloud-based platform is widely used all over the world for payroll management, HR management, employee records management and other HR-related and staffing purposes.
Earlier this month, Goldman Sachs shared a list of high-margin growth stocks with its commentary on the overall market and possible future scenarios. Workday was one of the stocks. The firm’s analyst David Kostin recommended investors to own high-margin growth stocks versus low-margin growth stocks.
As of the end of the fourth quarter of 2022, 83 hedge funds tracked by Insider Monkey had stakes in Workday.
1. Microsoft Corp
Number of Hedge Fund Investors: 259
Microsoft’s LinkedIn is the second biggest job advertising platform in the world. Amid the flurry of layoffs, the platform is seeing record usage growth. According to Sensor Tower, LinkedIn’s mobile app was downloaded a whopping 58.4 million times worldwide in 2022 across the Google Play and Apple app stores. This shows a 10% increase from the previous year. In the fiscal first quarter of 2023, LinkedIn’s revenue jumped about 17%. The company said that it has reached 150 million subscriptions to newsletters on LinkedIn, up four times when compared to the prior year. With a massive backing by Microsoft and new feature launches, LinkedIn is on path to becoming the biggest jobs platform and the go-to place to find jobs for billions of people.
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This article is originally published at Insider Monkey.
