This global staffing company beat earnings estimates by $0.02 in the most recent quarter and estimates have been revised upward by $0.12 in the past 90 days.
ManpowerGroup (MAN)
from Dow Theory Forecasts
Its shares down 12% for the year, ManpowerGroup (MAN) felt some growing pains as the global markets moved through the early innings of a recovery. Earlier this month, rival Adecco (AHEXY), the world’s largest staffing company for temporary workers, reiterated Manpower’s July remarks that growth remains sluggish in France. France is Manpower’s largest geographic market (26% of sales and 32% of operating profit in the first half of 2014).
Yet Adecco also described a sustainable increase in hiring for employers in the U.S. and Europe. Hiring activity continues to pick up in both regions, particularly with industrial companies. Employers tend to hire temporary workers in the early stages of a recovery, before they gain enough confidence for permanent hires. Adecco’s observations coincide with improving operating momentum for Manpower.
Sales rose 6% in the June quarter, Manpower’s strongest growth since the September 2011 quarter. Cash from operations jumped 51% to $452 million for the 12 months ended June. At 15 times trailing earnings, shares trade 36% below their five-year average and 25% below the median stock in the S&P 1500 human-resource and employment services industry. Manpower, earning a Value rank of 87 and Overall rank of 97, is a Focus List Buy and a Long-Term Buy.
Richard J. Moroney, CFA, Dow Theory Forecasts, www.dowtheory.com, 800-233-5922, August 18, 2014