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3 Staffing Industry Stocks to Ride High on Trump's Policies

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The Zacks categorized Staffing Firms industry outperformed the benchmark S&P 500 index following the presidential win of Donald Trump. Since Nov 8, 2016, the staffing industry has seen a healthy rise of 22.1% to date, while the S&P 500 gained 9.6%. This is primarily attributable to the proposed pro-growth policies of Trump.

In Mar 2017, the U.S Labor Market witnessed an addition of 98,000 employees, with the unemployment rate falling to 4.5% in the same time period. The hiring pace in the U.S. is anticipated to remain positive in second-quarter 2017 with 22% of employers planning to increase their staff intake between April and June.

According to a survey conducted in Feb 2017, economists project an average monthly increase of 171,000 jobs this year. Over the next 10 years, Trump has set a goal of adding 25 million jobs, which would require addition of 208,000 heads a month. Consequently, payroll gains are forecast to be sluggish, owing to factors including employers' difficulty in filling in positions and tepid growth in the working-age population.

Let us have a look at three stocks in the Staffing space that are likely to benefit from the new policies:

ManpowerGroup Inc.MAN is the global leader in the employment services industry and has a well-established network of 2,900 offices in 80 countries. The company offers its services to approximately 400,000 clients, including small and medium sized enterprises across all industry sectors as well as the world's largest multinational corporations. ManpowerGroup is likely to benefit from the new policies, as more hiring is in the cards. The company also expects to experience income growth across all its segments.

The company currently has a VGM Score of 'A', putting it into the top 20% of all stocks we cover. In addition, the company has a long-term growth expectation of 13%. It also outperformed the industry with an average return of 23.5% since Nov 8, 2016, compared with 22.1% gain for the latter.

Manpower currently carries a Zacks Rank #3 (Hold).

Heidrick & Struggles International, Inc.HSII provides executive search, culture shaping and leadership consulting services. The company offers recruitment, management and deployment of senior executives. The Zacks Consensus Estimate for its current-year earnings jumped 5.2%, over the last 60 days.

The company's expected growth rate for this year is 13.1%, higher than the broader industry's gain of 4.8%.

Heidrick & Struggles currently has a VGM Score of 'A' and sports a Zacks Rank #1 (Strong Buy). Our research shows that stocks with a VGM Score of 'A' or 'B', when combined a Zacks Rank #1 or #2 (Buy), offer the best investment opportunities for investors. Consequently, Heidrick & Strugglesappears to be a solid investment proposition at the moment compared to its peers.

Since Nov 8, 2016, the company outperformed the industry with an average return of 34.3%.

Kforce Inc. ( KFRC provides professional and technical specialty staffing services and solutions globally. The company is in a restructuring mode as it continues to divest non-core operations and invest the proceeds in higher-growth markets. The Zacks Consensus Estimate for its current-year earnings rose 15%, over the last 60 days.

The company has a VGM Score 'A'. The stock also outperformed the industry with an average return of 33.1% since Nov 8, 2016. Kforce has a ROE (Return on Equity) of 27.85% which is favorable compared with the industry. Its expected growth rate for this year is 27.2%, more than the industry's gain. This stock currently sports a Zacks Rank #1. You can see the complete list of today's Zacks #1 Rank stocks here.

Bottom Line

These stocks are expected to see brighter days as the year progresses. With the increase in demand for staffing services, these companies are likely to record higher revenues in the upcoming quarters.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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