Is It Time To Buy These Three Staffing Companies?

The U.S. is finally in the midst of a recovery, reaffirming a positive outlook for the human resources and employment industry. Solid demand for labor in America, as companies added a combined 1.7 million workers in the first 10 months of 2013, is opening opportunities for staffing companies. Here are three employment players that might profit from this growth: Robert Half International (NYSE: RHI  ) , ManpowerGroup (NYSE: MAN  ) , and TrueBlue (NYSE: TBI  ) .

Strong in America
Robert Half International is one of the largest specialized staffing firms in the world, and the company posted very good third-quarter results. Net income reached $66.4 million, up 15% compared to the prior-year quarter. Demand for the company's services remained strong, driven by its parent internal audit company Protiviti and the technology and permanent placing divisions, mainly in the U.S.

Remarkably, Robert Half increased net income and earnings per share in excess of 15% on an annual basis for the past 14 consecutive quarters--a truly impressive performance. Revenue has been accelerating year-over-year for the past three years, driven by demand for professional staffing services, particularly in the U.S.

In addition, Protiviti remains a great contributor to the company's growth as it has driven revenue. The company's positioning in the technology sector, which leads the way as far as hiring is concerned, turned the company into what it is today.

However, Robert Half still lacks growth in its international markets, and soft demand for staffing services particularly in Europe could put a cap on future performance.

Amazing results
ManpowerGroup is a well-known recruitment company with 400,000 clients and a presence in 80 countries. Manpower's third-quarter results were impressive. Net earnings improved 50% year-over-year to $94.7 million, driven by positive revenue trends and operational leverage. Operations in Europe showed slow but steady improvements, which is acceptable given the circumstances.

Manpower continues to enjoy good momentum in its strategic focus areas. Its brand value and its strong worldwide network give it a competitive advantage, which reinforces its dominant position in a market where clients can easily shift from one staffing provider to another.

Strategy-wise, the company aims to exit lower-margin businesses and focus on higher-margin activities. In fact, its current restructuring goes in this direction, as the company looks at securing higher savings and consequently increasing earnings.

Blue collar brings in the green
Finally, there's TrueBlue, a company which specializes in temporary blue-collar staffing services. Third-quarter revenue reached $451 million for TrueBlue, 19% growth from the year-ago quarter. Net income grew to $19 million from $14.3 million in the third quarter of 2012. Not bad at all.

TrueBlue's growth strategy, which comprises blending strong organic growth with acquisitions, has increased the company's share within the blue-collar job market. In fact, its 2013 acquisitions will add $300 million of go-forward annual revenue.

One last thing to consider is that despite the recovery, many companies still prefer not to make the commitment of hiring more expensive, full-time employees and instead choose to hire more temporary workers. This means good business for TrueBlue especially and also helps Manpower, and results in a relative reduction of professional services provided by companies such as Robert Half.

Final thoughts
Robert Half remains solid in technology, a very dynamic area for business generation. Pay close attention to its international operations and their impact on the company's overall profitability.

Manpower's performance has been amazing and the company should continue leading this market. Based on solid fundamentals, it is a good stock to hold with a mid-term perspective.

TrueBlue should profit from riding the current trend of temporary staffing. Looking ahead, the company's good performance should continue even in the event of a shakedown within the labor market.

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