Thursday, October 29, 2009

Initial Jobless Claims Fell by 1,000 to 530,000; Jobless Benefits Plunged 148,000 to 5.8 Million.

Initial jobless claims fell by 1,000 to 530,000, a smaller drop than predicted by analysts. The total number of people receiving jobless benefits plunged 148,000 to 5.8 million. That's the lowest number of total claims since March, and the biggest weekly drop since July.

Source: Investors


The jobless claims disappointed somewhat with the small marginal drop in weekly claims. However the continuing claims dropped nicely to 5.8 Million. This however maybe due to a larger then expected drop in people's benefits expiring.

Looking ahead next week is the monthly jobs report. This may rise to 9.9%. So even with the better then expected GDP numbers, employment continues to be a lagging indicator of improvement.

The United States continues to add debt to get itself out of this recession, with the auto clunker program, and the first time home buyers tax incentive, without these consumer offers growth would have continued to remain tepid.

Wednesday, October 28, 2009

Taleo 3Q 2009 Earnings

Taleo beats by$0.04 and beat on revs for the Q3 earnings of $0.20 per share, $0.04 better than the First Call consensus of $0.16, revenues rose 8.7% year/year to $50.7 mln vs the $49.9 mln consensus.
Taleo growth story continues although at lower levels with 9% growth this third quarter. Operating basis Taleo managed to break even which is a good sign; however the macro economy continues to be weak which may continue to pressure future growth going forward. Taleo seems to be well positioned even as growth in the employment sector continues to be weak in the near term.

Wednesday, October 21, 2009

Robert Half International Q3 09

Robert Half International reported .02 better than First Call consensus of .04 estimate. Revenue fell year o/ year 37.4% to 725.9 million which was light of the $729.3 million consensus.

"While the global business environment during the third quarter remained challenging, year-over-year revenue declines in our staffing operations continued to moderate and, on a sequential basis, we saw some improvement in revenues in September."


My take on RHI is that they did a remarkable job of cost cutting, and continues to operate with what they got. They don't have any plans to add space, thus they have controlled their debt at remarkable levels. 

The take from the conference call is that they see business for the most part stabilizing. Although, it is too early to tell if this will be more then a mild up tick.

Margins have been affected mildly, while they are able to grow near their top line revenue.

Perm employment has also been better then expected, although this is a highly variable space.

I wouldn't invest in RHI till there is more stabilizing, although I do find that their business is mildly attractive due to the very low debt, and very good cost controls.

Manpower 3Q 09 better then expected; 4Q 09 Warning

Manpower reported earnings .09 better then First Call estimates, and revenues fell 26.0% year over year at $4.19 billion versus 3.95 Billion consensus.

Manpower issues downside guidance for the 4th quarter. It sees EPS of .17 - .27 vs. .28 consensus.

"We continued to experience sluggish demand for our services as the labor markets throughout the world were hampered by lack of demand for companies' products and services."


Pretty lackluster report. Margins was lower then anticipated, cost controls were not as strong as they could have been. Debt continues to restrict MAN from making sound investment.

Took some one time charges, which wasn't advantageous to their bottom line.

Guidance was very weak compared to the comps, which I have been very vocal that even after today's drop in stock price is dramatically overvalued. advised it's readers to sell prior to earnings.

-S&P Research advised its clients to sell MAN, after Manpower announced its earnings.

Near term this stock should continue to fall, as their just reported quarter is historically their strongest of the year. The 4th qt. may become seasonally weak, which they have already warned in their guidance. Guidance was extremely disappointing considering that most analysts had very tepid estimates, and didn't raise much in terms of their estimates as Manpower's stock appreciated. Still MAN is having continued operating problems. Since 2007, its earnings, net income, and EPS has declined year o/ year.

Sunday, October 11, 2009

Manpower MAN Valuation October 2009

So recently Citigroup Research has downgraded its rating near term of Manpower from "Buy" to "Hold", I will touch my own opinion of the valuations of MAN. Please do your own research with regards to the buying and selling of equities. I am not endorsing or advocating for the direction of a position.

From the near term analysis, MAN still seems overvalued.

P/E aspect MAN trades at 75.5 times current earnings. This should improve as MAN sales improve. However, at current mutiples this is well ahead of its valuation versus the SP and its peers.

Price to Book is also another metric to value a stock. Currently MAN trades at 1.72 which is well above its fair book value.

The yield of MAN is also below that of the SP. MAN current yield is 1.32%. The average is about 2.65 for the SP. Remember that compounded dividend may help your investment grow and offset any near term losses.

MAN's current profit margins of .7% also leaves growth oriented investors to be very cautious. Stock prices usually follow bursting sales and net income. EPS is a -82.09% and sales are a -35.70% for the year compared to last year.

Profit margins also continue to be very uneven, thus difficult to project business activity due to the nature of this cyclical cycle. Current year is 1.02%, last year 2.36%, two years ago it was 2.27%.

MAN also has a debt load, currently at 33.10%. Companies borrow to expand, however as sales falls, and credit conditions remain tight it is advised to look at companies that don't need to borrow, or leverage themselves as much to grow. If another recession becomes present in the near term once this initial stimulus wears off, then this debt may possibly become a problem.

So the bottom line, is that growth oriented investors should look elsewhere for a better story. Value investors should probably look elsewhere for a higher yield. While, those that fall in between should wait and see earnings on the 21st of this month. This is important as MAN projects this to be their strongest quarter of the year. However, will this justify their current valuation. At the mutiples of well over 75x current earnings, and with sales and profit margins as weak as they are, MAN should not be trading at the current multiples. It is out of line versus its peers and versus the market. If there are any questions regarding this analysis feel free to shoot a comment, and I will be more then happy to respond.

Friday, October 9, 2009

Initial Claims Ending Week Oct 3 2009 US

Current the official unemployment rate in the US is 9.8%. Economist feel that it will take till 2013 to have our unemployment hit 5%.

""Never before has business shed so many workers so fast, so many people failed to find work who are looking for work, and so many dropped out of the labor force as in the current circumstance," said Allen Sinai at Decision Economics."

The Labor Department reported that initial claims fell 33,000 to 521,000 in the week ended Oct. 3.

However, the decrease in continuing claims likely reflects people exhausting their unemployment benefits after several months of looking for work. This does not reflect that jobs are abundant, nor does it mean that economic conditions have improved dramatically.

Sunday, October 4, 2009

Sept 2009 Unemployment Numbers

Pretty bleak numbers came out this past Friday.

263,000 jobs lost vs. estimate of 175,000

Job losses up to 7.2 million

While the unemployment rate edged up to 9.8%

785,000 had stated that they were not working through a household study, rather then employer study.

U-6 rises from 16.8% to 17%. A clear tale that businesses continue to generate weak business growth for their products and services. The U-6 includes part-timers who want  full-time work but can't find one.

Weekly hours ticked down from 33.1 to 33.0. This continues to be a weak number especially when employers tend to add hours to current employees rather then hire temporary workers at the first sign of an improving economy. Staffing firms such as Robert Half, Manpower have said they see some regions stabilize. However, most regions continue to be weak in growth. I will touch on the point that certain stocks in this sector continue to be richly and overly priced.

Thursday, October 1, 2009

U.S. Initial Jobless Claims Rose 17,000 to 551,000

The number of Americans filing first-time claims for jobless benefits rose more than forecast last week, a sign companies are still cutting workers as the economy pulls out of the recession.

Applications rose by 17,000 to 551,000 in the week ended Sept. 26, from a revised 534,000 the week before, Labor Department data showed today in Washington.

The economy is on track for a jobless recovery and unemployment will likely remain high well into next year,” said Sal Guatieri, a senior economist at BMO Capital Markets in Toronto. “We’re just not seeing a pickup in hiring. It means a long road to full recovery.”

Forty-one states and territories reported an increase in claims, while 12 reported a decrease. These data are reported with a one-week lag.

Source: Bloomberg

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