So recently I checked the valuations of Manpower, and feel that estimates overly gauge a rebounding sentiment in a possible recovery. Manufacturing has continued to hug the bottom in terms of production, and hours along with most wages have continued to be depressed.
Manpower may have generated billions in sales, yet their profits from this recent quarter tells a more stressing sign.Lets take a look at their most recent reported quarter:
"Manpower Inc. (NYSE: MAN) today reported that net earnings for the three months ended March 31, 2009 were $2.3 million, or 3 cents per diluted share, compared to $75.5 million, or 94 cents per diluted share, a year earlier. "
That's a large free fall in net earnings; yet their stock continues to trade over 22x earnings.
While revenues also took a large hit."Revenues for the first quarter were $3.6 billion, a decrease of 32% from the year earlier period, or a decrease of 22% in constant currency. "
"Revenues for the first quarter were $3.6 billion, a decrease of 32% from the year earlier period, or a decrease of 22% in constant currency. "
Ask yourself why invest in a company such as Manpower, and the other staffing firm when these valuations are not up to par to their earnings. 22x earnings for a company that just released dire numbers is a cause for concern.
They should continue to cut overhead and continue to find cost controls as their earnings and revenue decelerate.