Zacks Investment Research upgraded
Cross Country Healthcare Inc
) to a Zacks Rank #1 (Strong Buy) on Jan 07 on the back of its
recent acquisition of the staffing unit of
On Assignment Inc.
). In fact, estimates have been rising ever since the company
reported better-than-expected earnings in the third quarter of
2013 on Nov 6.
Why the Upgrade?
On Dec 2, this provider of healthcare staffing solutions
acquired the operating assets of On Assignment's Allied
Healthcare staffing division for $28.7 million. The acquisition,
which was funded with a combination of cash and borrowings under
its credit facility, is expected to be accretive to Cross
Country's 2014 earnings by approximately 4 cents per share.
Post-acquisition, the company will retain the key managers of
We believe the acquisition is a strategic fit for Cross
Country, as it will strengthen its customer base and expand its
market presence. In addition, the acquisition perfectly
complements its existing lines of business, both from a
geographic and staffing specialty perspective.
The Allied Healthcare business owns 84 employees and makes
placements in more than 125 specialties from 23 branch offices.
It generated $39.5 million in revenues in 2012 and is projected
to report approximately $41 million in revenues by the end of the
fourth quarter 2013.
We expect the acquisition to boost the company's revenues,
which declined in the recently reported third quarter. Despite
sluggish sales, Cross Country posted earnings of 5 cents, which
surged 150% year over year and were also above the Zacks
Consensus Estimate of a loss of 1 cent. The upswing in earnings
came on the back of strong pricing and cost management, which
also led to improvement in margins.
This staffing firm witnessed sharp upward estimate revisions
after announcing its third quarter 2013 results. Most of the
estimates for 2013 and 2014 increased over the past 60 days.
Other Stocks to Consider
Other players worth considering in the staffing industry
AMN Healthcare Services Inc.
), both with a Zacks Rank #2 (Buy).
AMN HLTHCR SVCS (AHS): Free Stock Analysis
ON ASSIGNMENT (ASGN): Free Stock Analysis
CROSS COUNTRY (CCRN): Free Stock Analysis
KORN/FERRY INTL (KFY): Free Stock Analysis
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