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…
