Five recruitment stocks that continue to trounce the market

Tuesday, Apr 29 2014 by
5
Five recruitment stocks that continue to trounce the market

Small cap recruitment companies have soared in price over the past 12 months, with bullish investors attracted by their exposure to an improving economic outlook in the UK and beyond. Yet despite the leaps in price, a number of these shares are still valued moderately. Not only that, but they offer top-notch quality and momentum signals too. So how do the top ranking recruiters stack up? We put Stockopedia’s Stock Comparison tool to work...

Figures from the Office for National Statistics (see their chart below) confirmed recently that UK employment rates have hit a five-year high. Staffing firms that supply temporary and permanent workers have naturally benefited from this rise, with growing earnings and corresponding improvements in share prices. Currently, five of these stocks rank in the top 2% of the market based on Stockopedia’s StockRanks - a blended range of metrics that analyse each company’s Quality, Value and Momentum (QVM). No other sector boasts such a concentration of high ranking companies, with nearly all of them showing continued relative price strength in recent months. Using Stockopedia’s Stock Comparison tool it’s possible to get a side-by-side comparison of where each of these shares is excelling (or failing). Subscribers can see the full Stock Comparison here - and see a full list of Employment Services firms here.

Comparing the recruiters

In terms of the overall ranks, Networkers International (LON:NWKI) leads the line with a StockRank of 99.8/100. Unlike other firms, the company specialises in recruitment niches mainly around telecoms, IT and engineering. Often this kind of focus can give a business a defensible edge against competition. As it turns out, Networkers’ return on capital (often used as a measure of that edge) is currently an impressive 27.6% - nearly double that of its nearest peer here (Staffline). It also has a better than average, operating margin of 3.49%. As an extra sweetener, Networkers has the best forecast dividend yield of the bunch, at 3.4%.

 

At £20.3 million, Empresaria (LON:EMR) has a market cap that’s less than half that of Networkers. But in terms of value, the company beats the crowd on nearly every common valuation metric. While eye-catching, that value appeal may need…

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As per our Terms of Use, Stockopedia is a financial news & data site, discussion forum and content aggregator. Our site should be used for educational & informational purposes only. We do not provide investment advice, recommendations or views as to whether an investment or strategy is suited to the investment needs of a specific individual. You should make your own decisions and seek independent professional advice before doing so. Remember: Shares can go down as well as up. Past performance is not a guide to future performance & investors may not get back the amount invested. ?>


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Empresaria Group plc is a United Kingdom-based international specialist staffing company. The Company's principal activity is the provision of staffing and recruitment services. The Company is organized across three regions: UK, Continental Europe and Rest of the World and operates across seven key sectors. The Company targets a balanced and diversified spread of operations across its regions and sectors. The Company also targets professional and specialist job levels where its brands can offer value added services to clients. The Company has three main service lines, temporary recruitment, permanent recruitment and offshore recruitment services. The Company’s offshore recruitment services represents a range of different recruitment services and provides training services in South East Asia. The Company's brands include Alternattiva, Ball and Hoolahan, Become, FastTrack and Greycoat. It has operations in 21 countries. more »

LSE Price
79p
Change
1.3%
Mkt Cap (£m)
38.0
P/E (fwd)
6.1
Yield (fwd)
1.8

Staffline Group plc is a holding company, which is engaged in the provision of recruitment and outsourced human resource services to industry and services in the welfare to work arena and skills training. The Company has two segments: Staffing Services, which includes the provision of temporary staff to customers, and PeoplePlus, which includes the provision of welfare to work and other training services. Its Staffing Services focuses on providing complete labor solutions in agriculture, food processing, manufacturing, e-retail, driving and the logistics sectors. Its recruitment business operates from well over 300 locations in the United Kingdom, Eire and Poland. The Staffing brands include Staffline OnSite, based on clients' premises providing both blue and white collar, out-sourced, temporary workforces. Its Employability includes work program, prime contractor in over nine regions and sub-contracts in approximately five regions in England. more »

LSE Price
917p
Change
-0.5%
Mkt Cap (£m)
257.6
P/E (fwd)
7.8
Yield (fwd)
3.1



  Is LON:NWKI^J17 fundamentally strong or weak? Find out More »


6 Comments on this Article show/hide all

Glaws2 29th Apr '14 1 of 6

Did you mean to include Staffline rather than Harvey Nash in the comparison table ?

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Mechanical Bull 29th Apr '14 2 of 6

I would suggest that both Harvey Nash (up 50% in the past year) and Staffline (up 90%) should be included in this list.

Blog: Mechanical Bull Blog
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Glen Keedy 30th Apr '14 3 of 6

Hi Ben
Good graph at the top showing that we are closer to full employment than people think.
In your article there is a link to employment services which is a sub group of Prof & Com Services sector. Apart from clicking the article link, how would I find these sub groups under the sector? When I click sector and then Prof & Com Services, I get all the stocks in that sector, but from that page I cannot see how to get to the sub groups in that sector.
Cheers
Glen.

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Edward Croft 30th Apr '14 4 of 6
1

Glen - we actually have a 5 deep hierarchy of sectors, business sectors, industry groups, industries and activities with the Thomson Reuters Business Classification Schema. In our first design we have published only the 10 top level economic sectors and the 45 industry groups. Later this year we will be publishing more of the hierarchy, especially as our coverage grows. The 'activities' tend to have so few stocks in them in a market like the UK that they are not very useful, but from a global perspective they become highly useful. We found that for ranking purposes the Industry Groups have the most consistent number of available stocks.

The link you refer to was one we generated internally. I hope you can be patient while we bring more of the classification schema to visibility on the website later this year. In the meantime I'll let you know a trick. If you add 10, 20, 30, 40 , 50, 60, 70, 80, or 90 to the end of a industry group URL you can dig a bit deeper.

e.g.
http://www.stockopedia.com/sectors/specialty-retailers-534030/

going deeper...

http://www.stockopedia.com/sectors/specialty-retailers-53403010/
http://www.stockopedia.com/sectors/specialty-retailers-53403020/
http://www.stockopedia.com/sectors/specialty-retailers-53403030/
..

That's all I'm hinting at for now !

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Glen Keedy 30th Apr '14 5 of 6

Ed
Thanks for the hint. Time to go off and do a little URI hacking ;-)
Cheers
Glen

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Edward Croft 15th May '14 6 of 6
1

Staffline up 16% today on a bullish update and placing for acquisition. Market clearly likes these stocks right now.

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About Ben Hobson

Ben Hobson

Strategies Editor at Stockopedia. My goal is to help private investors learn and invest with confidence through the articles, ebooks and other resources we publish on site. I also occasionally bunk off to interview famous investors at expensive restaurants. I studied History at Aberystwyth University, trained as a journalist and covered business news and corporate finance before settling in as one of the first staff members at Stockopedia.  Away from Stockopedia I'm a mountain bike junkie. more »

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