Why Monster Worldwide Shares Popped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Monster Worldwide (NYSE: MWW  ) jumped more than 15% Thursday after the company not only beat third-quarter earnings estimates and provided strong forward guidance, but also announced it will sell a minority stake in JobKorea, and  in a separate transaction expand its joint venture with Alma Media.

So what: Quarterly revenue came in at $197 million, which translated to income from continuing operations of .08 cents a share, income from discontinued operations of .03 cents a share, and therefore yielding basic earnings per share of $0.11 or $11.27 Million. What's more, Monster Worldwide said that it expects adjusted earnings from continuing operations between 9 cents and 13 cents per share for the fourth quarter. Wall Street had expected 9 cents per share from continuing operations in the fourth quarter. In the release Monster also stated that it is selling a 49.9% minority stake of JobKorea to Asian private equity firm H&Q Korea, for a total of $90 million. Also, in a separate transaction, it was announced that Monster Worldwide is also expanding its existing joint partnership with Alma Media. As part of the new venture, both companies will "contribute several additional entities and businesses into the existing joint venture." This, in turn, will form a significantly larger joint venture, where Monster will have a 15% equity stake, which it can potentially increase to 20% down the road.

Now what: The latter move significantly grows Monster's position in the Baltic and Eastern Europe, where it says its Alma partnership will afford it the number-one market share in the region. 

It's also worth noting that Monster Worldwide is now profitable on a GAAP basis, reporting GAAP net income of $11.2 million during the quarter. That's a huge improvement over last year's $194 million GAAP net loss.With shares currently trading at a reasonable 13.8 times next year's estimated earnings, I think the stock could still prove a bargain for patient long-term shareholders down the road.

Editor's Note: The original version of this article misstated Monster's Non-GAAP EPS. This has been corrected, and the Fool regrets the error.

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Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On November 08, 2013, at 1:43 PM, monsterworldwide wrote:

    Steve – we want to help clarify part of your analysis. Prior to selling the minority stake in JobKorea, it was wholly owned by Monster. Monster sold a minority stake and retains majority ownership and management control. It might be helpful to adjust the language of your post to reflect this fact. Additionally, the deal with Alma Media is an expansion of an existing joint venture, with Monster contributing our operations in the region. The Korean and Eastern European transactions were not linked. One wasn’t used to fund another.

  • Report this Comment On November 08, 2013, at 11:33 PM, TMFSymington wrote:

    @monsterworldwide, Thanks for your fair input; I went ahead and requested revisions to a few words to make sure the analysis is crystal clear.

    Fool on!

    Steve (TMFSymington)

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9/29/2016 11:02 AM
MWW $3.59 Up +0.03 +0.84%
Monster Worldwide CAPS Rating: **