Monster's Ball

The cornerstone of every good horror franchise is that no matter how grim it seems for the villainous baddie by the end of the film, death is just a temporary condition. How else could you explain Leprechaun 6 or Freddy v. Jason? The monster always comes back.

The Monster (Nasdaq: MNST) always comes back.

For the online career-placement specialist, the sequel seems to be shaping up to be a thriller. Let's cut to the flashback sequence. You probably remember the dot-com bubble days, when Monster and rival HotJobs.com were paying up for million-dollar Super Bowl ads and watching their share prices soar as hungry job seekers (and even hungrier employers) flocked to the online services.

Monster, then trading as TMP Worldwide, saw its stock triple in 1999 and Yahoo! (Nasdaq: YHOO) had no problem overpaying to acquire Hot Jobs. But then the bottom fell out -- the weak job market made the job hunters hungrier while the employers were full. Commissions and fees tanked, and the company's executive-search business fell even harder. Investors left Monster for dead.

Big mistake.

While the company produced another dip in quarterly sales last night, it also reversed a loss by earning $0.08 a share for the June quarter. The job market may not have improved, but investors seem confident that Monster is making all the right moves. The shares have more than tripled since their March lows, as the company trimmed its overhead and in March spun off its e-Resourcing and executive-search subsidiaries as Hudson Highland (Nasdaq: HHGP).

With the stock discounting an economic recovery, the shares aren't exactly cheap right now. According to USB Piper Jaffray analyst Brett Manderfeld, Monster is poised to earn as much as $0.90 in 2005 if the job market recovers in 2004. Yes, the company is cash-rich, but because it has 112.8 million shares outstanding, its net cash balance falls shy of a buck a share.

Paying more than 25 times an optimist's projection for earnings two years out is dicey. That's why investors might want to take a breather and hold out for a lower price. We'll save you a seat for the screening of Monster 3.

Are you looking for a career change? Do you know where the jobs are? Wondering if "professional loafer" looks awkward on a resume? All this and more -- in the Ask the Headhunter discussion board . Only on Fool.com.