The Zacks Analyst Blog Highlights:Manpowergroup, Genpact, Kforce, SAP and IBM
CHICAGO, June 3, 2014 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the Manpowergroup (NYSE:MAN-Free Report), Genpact Ltd (NYSE:G-Free Report), Kforce Inc (Nasdaq:KFRC-Free Report), SAP AG (NYSE:SAP-Free Report) and IBM Corp. (NYSE:IBM-Free Report).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
Here are highlights from Monday's Analyst Blog:
3 Hot Staffing Firms Trending Now
Since the onset of the recession one of the fastest growing industry segments has been the Professional & Business Services segment (read temp jobs). This segment has seen sustained traction for the past many quarters due to several economic situations, both domestically, and globally. These "temp" jobs have been correlated to the overall unemployment levels over the past several years.
In April, the unemployment rate dropped from 6.7% to 6.3% with the number of unemployed persons decreasing by 733,000. According to the BLS Employment data, nonfarm payroll employment rose by 288,000 in April. The upcoming May unemployment numbers are expected to be released on Friday June 6th, and the street is expecting an increase of 210,000 nonfarm payroll numbers.
Looking Forward
According to the Palmer Forecast, the demand for temporary workers in the USA is expected to increase 8.5% on a seasonally adjusted basis for the second quarter 2014; this is after a 9.3% increase in Q1 2014. More importantly, this would make the seventeenth consecutive quarter of year-over-year increases in the demand for temporary workers.
Specifically, the Professional & Business services segment saw the greatest percentage of new jobs in April, accounting for just over 26% of the 288,000 jobs created (Education and Health Services was the second highest, accounting for 13.9% of total new jobs). Moreover, Professional & Business service companies are expected to once again lead all industry segments in new hires in the coming quarters.
Unemployment Predictions
On Friday June 6th, BLS will announce the unemployment rate, which is expected to rise slightly from 6.3% to 6.4%. But more importantly, we will see if the continued hiring by staffing services still ranks as the largest job producing category.
Currently, there are three companies with a Zacks Buy rating in the Business Services Segment, which should see both the top and bottom lines positively impacted by the sustained hiring through the usage of staffing services.
Companies to Consider
Manpowergroup (NYSE:MAN-Free Report), a Zacks Rank #1 (Strong Buy), is a non-governmental employment services organization, located in the US, UK, and France. The company provides a variety of staffing and workforce management services and solutions. This company has had four consecutive quarters with a positive earnings surprise, with a four quarter average of 19.85%. This company reports second quarter earnings on July 18. Over the past sixty days, MAN's EPS estimate for Q2 has jumped from $1.21 to $1.32.
Genpact Ltd (NYSE:G-Free Report), a Zacks Rank #1 (Strong Buy), manages business processes for companies around the world. They offer finance and accounting services, including account payable services, payment and inquiry management, preparation of financial statements, closing and reporting, cash management, and financial planning. Like Manpower, Genpact has beaten earnings estimates for the past four consecutive quarters, with an average positive beat of 22.25%. This company reports second quarter earnings on August 5. Over the past sixty days, G's EPS estimate for FY 2014 has risen from $0.87 to $0.92.
Kforce Inc (Nasdaq:KFRC-Free Report), a Zacks Rank #2 (Buy), is a full-service, web-based specialty staffing firm providing flexible and permanent staffing solutions for organizations and career management for individuals. Over the past four quarters, KFRC has posted an average positive earnings surprise of 4.4%, and over the past sixty days KFRC's EPS estimate for Q2 has risen from $0.30 to $0.32.
Conclusion
The economy grew at a 2.6% pace during the fourth quarter 2013, but in Q1 2014 we saw a large contraction, mostly due to the horrendous weather in the beginning of the year, which caused the rate to decline to -1.0%. But information ranging from manufacturing to employment suggest that the economy will accelerate sharply in the second quarter 2014, and beyond. During this bounce back, we should see more companies utilizing staffing services to fill their employment needs.
SAP, IBM to Transform Transportation Industry
Shares of SAP AG (NYSE:SAP-Free Report) rose about 0.3% since May 29 when the company revealed its collaboration with IBM Corp. (NYSE:IBM-Free Report) to leverage customized business applications and consulting services for the transportation and logistics industry.
SAP and IBM will together develop a transportation platform comprising advanced technologies including analytics, cloud computing and mobile solutions among others. This platform will be designed to standardize the functional processes and to optimize the operational performance by driving up innovation in business processing.
The challenging needs of this competitive industry are propelling the transportation companies to transform their businesses by upgrading the IT framework and improving customer relationships. This new platform will aid such companies to efficiently achieve their goals.
SAP's software strength and its drive for co-innovation will be perfectly complemented by IBM's expertise in consultation and strategic implementation. Further, IBM has ample experience in undertaking and managing transformation across large-scale global businesses.
SAP is intending to integrate some of its applications like SAP Transportation Management, SAP Event Management, SAP Customer Relationship Management and SAP Billing and Revenue Innovation Management solutions for this platform. Alongside, IBM via its SAP Center of Competence has gained in-depth industry knowledge, which will come handy in delivering customized SAP solutions to the transportation industry.
Apart from this, the two companies will be collaborating on issues pertaining to business development, sales, sales support along with marketing and consulting strategies. The new platform will be implemented by the transport organizations in phases considering their needs while utilizing the present infrastructure.
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
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