Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Is Monster Worldwide, Inc. (MWW) Cheap Now?

Page 1 of 2

Monster Worldwide, Inc. (NYSE:MWW) has been losing its popularity in the recruitment industry, due to the sudden emergence of social networking sites LinkedIn Corp (NYSE:LNKD) and Facebook Inc (NASDAQ:FB). Consequently, Monster Worldwide, Inc. (NYSE:MWW) has seen its share price drop significantly, from $25 per share at the beginning of 2011 to only $5.50 per share today. At the beginning of May, the company said that if it could not sell itself, it would buy back its shares. Is Monster Worldwide a buy now? Let’s find out.

Monster Worldwide, Inc. (NYSE:MWW)

Business snapshot

Monster Worldwide, Inc. (NYSE:MWW) describes itself as a global leader in the recruitment industry, with the presence in more than 40 countries, operating in three main business segments: Careers-North America, Careers-International and Internet Advertising & Fees. Most of its revenue, $463 million, or 52% of the total 2012 revenue, were generated from Careers-North America segment while the Careers-International segment’s revenue was $351.1 million. In 2012, Monster Worldwide, Inc. (NYSE:MWW) produced a significant loss of nearly $259 million on the total revenue of $890.4 million. The significant loss was mainly due to a $262.7 million in goodwill impairment charge of Careers-China.

What I like about Monster Worldwide, Inc. (NYSE:MWW) is its conservative capital structure. As of March 2013, it had $851 million in equity, $131 million in cash and only $170 million in debt. However, because the company has grown via acquisitions, its goodwill amount was quite high, at $881 million. Thus, the tangible book value was negative at $(30) million. At $5.50 per share, Monster Worldwide is worth nearly $645 million. The market values the company at 0.73 times its sales and 12.5 times its forward earnings.

LinkedIn and Facebook – two huge social networking sites

As mentioned above, employees and employers have been turning to LinkedIn and even Facebook for employment opportunities. Many employers are using both LinkedIn Corp (NYSE:LNKD) and Facebook to advertise their career opportunities and to target selected potential employees. LinkedIn currently has as much as 200 million members in more than 200 countries. Thus, with $18.50 billion in total market cap, each LinkedIn user is worth $92.50 on the market. Most of its revenue, $523.6 million, or 53.8% of the total 2012 revenue, was generated from Talent Solutions, while the Marketing Solutions contributed only half of that, at $258.3 million in sales.

For the full year 2013, LinkedIn Corp (NYSE:LNKD) expected to generate around $1.43 to $1.46 billion. The adjusted EBITDA might come in the range of $330 – $345 million. In order to boost its potential Talent Solutions, Marketing Solutions and Premium Subscription revenue in a long run, LinkedIn has been trying to tap into the mobile space. In the middle of April, LinkedIn announced the acquisition of Pulse for around $90 million, one of the leading newsreader and mobile content distribution platform. For around three years in operations, Pulse has around 30 million users in more than 190 countries globally.

Page 1 of 2