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Why Dice Holdings Shares Spiked

By Sean Williams - Oct 24, 2012 at 4:05PM

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Is this meaningful or just another movement?

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 Dice Holdings (DHX 2.62%), an online career websites company focused primarily on the technology and finance sector, spiked as much as 15% after reporting better-than-expected third-quarter results.

So what: For the quarter, Dice reported a slight 3% increase in revenue to $48 million (excluding the acquisition of Slashdot and SourceForge) and a profit of $0.17. These tepid results, however, were enough to easily surpass the Street's expectations for a profit of $0.12 on revenue of $46.97 million. In addition, Dice's fourth-quarter and full-year revenue outlook of $51.4 million and $194 million, respectively, are both higher than the current consensus estimates. Its technology-focused Dice.com portal, which is responsible for roughly 70% of all revenue, demonstrated modest 7% growth, while its financial portal, eFinancialCareers, witnessed a 20% decline in revenue.

Now what: I do like Dice's initiative to make acquisitions when unemployment figures remain high, as it could set the company up for success when the economy regains its footing. However, I also have a really hard time thinking of positive things to say about staffing and recruitment companies with unemployment hovering around 8%. At 15 times forward earnings, Dice isn't particularly expensive, it's just not an intriguing enough value to excite me, either.

Craving more input? Start by adding Dice Holdings to your free and personalized Watchlist so you can keep up on the latest news with the company.

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