Robert Half Carves a 52-Week High - Analyst Blog

Shares of Robert Half International, Inc. RHI reached a new 52-week high of $43.10 on Apr 4, 2014, on expectations of reporting strong results in the upcoming quarter - first-quarter fiscal 2014.           

The closing price of this staffing company on Friday was $41.53, amassing a one-year return of 16.07%.

Growth Drivers

During its fourth-quarter conference call, Robert Half expressed its optimism for the upcoming quarter. On a year-over-year basis, management expects revenues to go up 5% backed by improvement in the employment scenario of the country.

Investors are encouraged by management's expectations of increased demand for skilled professionals at small and mid-sized businesses in 2014. The companies that do not have a human resource department of their own opt for Robert Half's personalized and consultative approach.

Robert Half also expects a rising need for skilled finance and information technology talent in the regulatory and compliance space. Management noted that for the first two weeks of January — the first month of the current quarter — revenues for temporary and consulting operations were up 2% versus last year. This is particularly encouraging and gives the company a solid start to the quarter.

A survey conducted by global consulting firm, Protiviti showed that unemployment rate is particularly low in the U.S. and temporary workers share in the total workforce of the country is at an all-time high. Moreover, the demand for flexible staffing is high as the companies benefit from variable cost labor. This trend is expected to boost Robert Half's flexible staffing solution from the ongoing climate.

Despite sluggish performance in the international markets, Robert Half witnessed strong earnings growth in its recently concluded (fiscal fourth-quarter 2013) driven by solid demand for skilled professionals in the U.S. In the reported quarter, the company reported earnings of 49 cents, ahead of the prior-year quarter by 16.7% and the Zacks Consensus Estimate by a penny. The company's permanent placement and technology staffing divisions and Protiviti operations delivered strong staffing revenues in the quarter.

Robert Half carries a Zacks Rank #3 (Hold). Another better-ranked in the business services sector is Korn Ferry International KFY which carries Zacks Rank #2 (Buy). Other stocks in the consumer staples sector worth considering include Monster Beverage Corp. MNST, Dr. Pepper Snapple Group Inc. DPS. Both these stocks carry a Zacks Rank #2 (Buy).