We recently reiterated our Outperform recommendation on
Monster World Wide, Inc
Earnings estimates have moved up significantly after the
company reported better-than-expected results for the third
quarter of 2012, beating the Zacks Consensus Estimate by 4
All the seven analysts covering the stock have increased their
estimates for 2012. For 2013, eight out of the ten analysts
covering the stock have increased their estimates.
Monster announced a series of restructuring actions in order
to focus more on its core business and improve its cost
structure, thereby boosting profitability and cash flow. The
restructuring actions include the sale of the ChinaHR business
and thereby reducing losses in developing markets. Monster aims
to continue to accelerate the redeployment of expenses into
marketing and sales in Monster's core markets (Europe and North
America), while curbing operating expenses in other geographies.
On a consolidated basis, these initiatives are expected to reduce
operating expenses by approximately $130 million on an annualized
In January, Monster announced a series of cost savings
initiatives amid an uncertain global environment. These
activities include a workforce reduction of approximately 400
associates, or 7% of its full-time staff on a global basis,
consolidation of certain office facilities along with control in
On the other hand, Monster is currently evaluating strategic
alternatives to maximize shareholder value, which includes the
possible divestiture of the company. The company had earlier
announced that it is assessing strategic alternatives with
respect to maximizing shareholder value, and retained Stone Key
Partners LLC and BofA Merrill Lynch as financial advisors in
connection with this review.
Monster continues to face competition from upcoming players
We believe the shares have already hit an all-time low and a
gradual recovery hereafter is on the cards. Thus, we maintain our
Outperform recommendation on the stock.
Our Outperform recommendation is supported by a Zacks #2 Rank,
which translates into a short-term rating of Buy.
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