As the American Economy Evolves, More Companies are Hiring Part-Time Work
In John Grisham's short story “Casino” Bobby Carl Leach, the richest and most ostentatious man in Ford County, Mississippi, reads every newspaper he can to find investing opportunities.
While Leach would focus on notices of auctions and foreclosures, drive by in his flashy Cadillac and check them out for a deal, the op-ed page of The Wall Street Journal recently carried a piece by Andrew Puzder that offers insight into opportunies to profit from the evolving American economy.
In his op-ed, “ObamaCare and the Part-Time Economy,” Puzder, the CEO of CKE Restaurants, detailed how more companies are hiring greater numbers of temporary workers -- to evade the higher costs of full-time employees due to the Affordable Care Act, which requires health insurance be furnished.
And as a result companies that provide project employees, ranging from prominent blue chips such as Paychex (NASDAQ: PAYX) to promising small caps such as Labor SMART (NYSE: LTNC), have found their business is booming.
The performance of stocks of in the $100 billion staffing industry in the United States has been so gaudy that even Bobby Carl Leach would blush. For 2013, Paychex is up more than 30 percent. Over the same period, Kelly Services (NASDAQ: KELYA), of the legendary “Kelly Girls,” has surged more than 28 percent. Team Health Holdings LLC (NYSE: TMH) has soared more than 40 percent since the first of the year.
The outstanding performance of workforce firms continues.
Labor SMART, in the $29 billion demand labor segment of the staffing sector, just reported a third record quarter. Business is so bullish for Labor SMART that its Q3 revenues were higher than the market capitalization for the company. In August alone, Labor SMART added over 100 new clients.
“The evidence that ObamaCare is having a negative impact on hiring is unequivocal, abundant and consistent with common sense,” Pudzer noted in his Wall Street Journal piece. But there is also a positive effect on the business operations of companies such as Paychex, Labor SMART, Kelly Services and others, as firms turn to temporary workers. That should continue into the future, as should the rising stock prices.
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