The staffing sector is trending up as the market is not properly valuing the fundamental as well as the secular growth opportunities, and the near-term cross currents in Europe around the sovereign debt issues are masking growth in the U.S., says Kevin D. McVeigh, CPA, Senior Business Services Analyst at Macquarie Group Limited.
“When you layer in how quickly temporary help is growing as a percentage of total nonfarm payrolls, I think it bodes well for a much greater market opportunity,” he said. “If you look at that overall, it is trending at about 1.8%, in a period that I would characterize as early to midcycle, versus the prior two peaks of about 2%.”
McVeigh has chosen Robert Half International Inc. (RHI) as a top pick in the staffing sector due to how healthy the demand has been on the IT side in the near term and the well-capitalized balance sheets of staffing firms overall as a group.
“One area in particular that has really, even through the downturn, exhibited resilient characteristics and has participated in and enjoyed nice strength in the upturn has been IT staffing, which bodes well for companies such as Kforce and Robert Half,” McVeigh said.
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