Don't Bet on Jobs

If you think finding a job is hard these days, try owning a piece of a website that's trying to match the unemployed with available openings.

Shares of Dice Holdings (NYSE: DHX  ) fell as much as 14% today after it offered up weak guidance for 2012. It was Monster Worldwide's (NYSE: MWW  ) turn to let investors down last week after the parent company of Monster.com posted weak fourth-quarter results and announced irony-dipped layoffs.

Dice isn't a conventional recruiter. The company runs career-specific websites along the lines of Rigzone for energy industry workers or ClearanceJobs.com for those with security clearance. Building community sites around single industries attracts both the employed and those looking to be employed.

It's a clever tactic, and Dice certainly held up better than Monster during the final three months of 2011. Revenue climbed 25% to $47.4 million. Net income climbed 82%, clocking in at $0.15 a share. This is essentially what analysts were expecting, and today would've been a reasonable day for Dice if the story ended there with healthy double-digit top-line gains in each of its four industry categories.

Unfortunately, Dice's outlook isn't as inspiring. Dice sees revenue growing 15% during the current quarter, and its 10% top-line growth forecast to $197 million is short of the $201 million that Wall Street was projecting. It doesn't get any prettier on the way down to the bottom line. Dice sees earnings of $0.10 a share for the current quarter and $0.57 a share for all of 2012, profit marks that fall well short of the $0.13 a share and $0.62 a share that the pros were targeting, respectively.

Workforce recruiting and the Internet seem to be a great match, but it hasn't been much of a job interview lately.

White-collar networking speedster LinkedIn (Nasdaq: LNKD  ) traded as high as $122.70 the day it went public nine months ago. The stock has gone on to shed nearly 40% of its value. China's 51job (Nasdaq: JOBS  ) has surrendered more than a third of its value since peaking this past summer.

It may not be fair to lump LinkedIn and 51job with Dice and Monster. LinkedIn hasn't shown any signs of weakening fundamentals. The shares were simply ridiculously overvalued out of the IPO gate last spring. 51job has missed Wall Street's profit targets in each of the past two quarters, but it's still growing at a healthy clip. Investors just bailed on Chinese dot-coms last year.

So where does Dice go from here? Well, it bought back a lot of shares this past quarter -- thankfully at prices lower than where the stock's at today. Dice is trading reasonably at an earnings multiple in the teens. Initiating a dividend policy may be a better call than continuing to repurchase its stock at this point, but it really seems as if Dice is hungry for an acquisition. When organic growth has meandered in the past, Dice has been quick to jump into a new industry.

Roll the dice, Dice. Surely there's another industry worth sweeping into your portfolio.

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