Rolling the Dice
The markets may look a bit choppy, but there’s little mistaking that the jobs picture is slowly improving, at least if you go by the headline figure. As of the most recent jobs report, the U.S. unemployment rate had dipped to 7.4%, its lowest level since December 2008. However, this figure masks an underlying problem with most job creation in 2013, namely that it’s part-time in nature.
With few businesses willing to gamble on full-time employment and the coming enactment of the employer portion of the Patient Protection and Affordable Care Act in 2015, we’ve witnessed 77% of all new jobs created up until July to be part-time. While I’m certain some people are thrilled to find any form of work, many are being underutilized, which is proving the perfect opportunity for job-seeking websites like DICE HOLDINGS, INC. (NYSE:DHX) to shine.
DICE HOLDINGS, INC. (NYSE:DHX)’s job platform allows employers and recruiters to seek out displaced workers for a monthly service charge. Its top revenue-earning engine is its Dice.com portal, which helps employers find out-of-work technology and engineering workers. As of the end of June, Dice had 8,650 total recruitment package customers with its other sites aggregating to an additional 3,550 customers. This may not sound huge, but it’s propelling Dice to annual top-line growth of 6%-8% and has allowed the company to build up a small but growing net cash position.
What really intrigues me with DICE HOLDINGS, INC. (NYSE:DHX) is the potential opportunity for a takeover. Now understand this is purely opinion on my part, but I feel Dice would make the perfect takeover target for LinkedIn Corp (NYSE:LNKD). Surprised I didn’t say Monster Worldwide, Inc. (NYSE:MWW)? The problem with Monster is it doesn’t have the cash to pull the deal off, and I don’t see any need for Dice to stoop to a merger of equals when it’s clearly holding its own, which is much more than I can say for Monster Worldwide! LinkedIn is looking for new niches to solidify its job search domination and Dice’s clearly defined job sectors will fit that need. To add, LinkedIn already has more than enough cash ($873 million as of last quarter) to make the deal happen, with no debt.
Could DICE HOLDINGS, INC. (NYSE:DHX) succeed without a buyout? I believe so! But one way or another, I project a suitor will come knocking on Dice’s door before 2015.
Foolish roundup
This week’s theme is all about finding three undervalued companies that have succumbed to macroeconomic concerns, but have the business model and balance sheet to succeed. While CBL & Associates Properties, Inc. (NYSE:CBL) could certainly improve its situation by paying down some of its debt, Aaron’s, Inc. (NYSE:AAN) could work on boosting its paltry dividend and DICE HOLDINGS, INC. (NYSE:DHX) could focus on reducing the uncertainty of revenue stream. These are all minor concerns if you dig deeper and look at the big picture for all three businesses.
I’m so confident that these three names will bounce off their lows that I’m going to make a CAPScall of outperform on each one.
The article 3 Stocks Near 52-Week Lows Worth Buying originally appeared on Fool.com.
Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.The Motley Fool recommends and owns shares of LinkedIn, Google, Facebook, Amazon.com, and Apple.
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