67 WALL STREET, New York - January 18, 2013 - The Wall Street Transcript has just published its Staffing, Outsourcing and Rental & Leasing Services Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
Topics covered: Workforce Flexibility Requirements - Growth in Temporary Staffing Demand - Secular Trend Toward Temporary Staffing - Strong Demand For IT Staffing - Growth in Equipment Leasing Adoption Rates - Consolidation Potential in Fragmented Industry
Companies include: Manpower Inc. (MAN), Robert Half International Inc. (RHI), Alliance Data Systems Corporat (ADS), Mastercard Incorporated (MA), Visa, Inc. (V), Western Union Co. (WU), Global Payments Inc. (GPN), Total System Services, Inc. (TSS), Corrections Corp. of America (CXW), Geo Group Inc. (GEO), Iron Mountain Inc. (IRM), FTI Consulting, Inc. (FCN), Kforce Inc. (KFRC), On Assignment Inc. (ASGN), Lender Processing Services, In (LPS), Heidrick & Struggles Internati (HSII) and many others.
In the following excerpt from the Staffing, Outsourcing and Rental & Leasing Services Report, an award winning expert analyst discusses the outlook for the sector for investors:
TWST: Are there particular industries that you see as really driving growth for staffing and other outsourced services? Health care seems to be one.
Mr. McVeigh: I'd say one area in particular where firms such as Kforce (KFRC) and Robert Half (RHI) are enjoying strong growth is in IT. IT has been very strong in this up cycle, and certain segments of IT have really been very, very strong. For consultants that have coding expertise with the transition from ICD-9 to ICD-10, as a result of some of the health care legislation - that's been an area where there are very few programmers that have that requisite skill set, and as a result you're seeing very strong demand.
I also think, based on some of the consolidation in the market - a good example is On Assignment's (ASGN) acquisition of Apex, a really good endorsement of the strength of the IT staffing cycle. As we think about areas of very strong outperformance in this up cycle, we think of IT, some health care IT. As well, we think finance and accounting will be strong, but on a relative basis IT should be stronger.
TWST: What are your favorite names in your coverage universe right now, and what do you like about them?
Mr. McVeigh: On the staffing side both Robert Half and Kforce are our top picks. These stocks tend to have much more of a professional staffing mix. Professional staffing tends to be an area where the supply/demand imbalance is much tighter. If you look at the blended overall employment rate, it's still elevated around 8%, but if you look at the subcomponent to that, college-educated is much lower than less-than-high-school, and Robert Half and Kforce play in that college-educated space that has very tight supply/demand.
Switching to the processors, we continue to like MasterCard (MA) and Visa (V) very much. That's a real nice play on secular growth, not only here in the U.S., but also internationally. Within the merchant acquiring space, Global Payments (GPN) is a name that we've been very positive on. This was a company that had been impacted by a data breach about six months ago, and has made tremendous progress addressing that. We think over the next three to six months the stock has upwards of 20% upside to it as they continue to address not only the breach but also capital allocation. So those are some of the top names in the space right now.
TWST: Are there any names you're particularly cautious about?
For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.