In this piece, we will take a look at the ten best staffing company stocks to invest in. If you want to skip our primer on the staffing industry and want to jump ahead to the top five stocks in this list then take a look at 5 Best Staffing Company Stocks To Invest In.
Staffing industry consists of firms that aid companies both large and small with their workforce-related needs. Worldwide, the sector was worth a staggering $445 billion in 2020, at a time when the coronavirus pandemic was wreaking havoc on industries and causing massive layoffs all around the world. Momentum in the sector can be easily analyzed, particularly in the United States which publishes data about key economic factors regularly.
One such factor, which is always a hot topic for the general public and the population, is unemployment. It can very well be argued that unemployment and the staffing industry are related since the latter is directly involved in reducing the former. One key unemployment figure is the nonfarm employment rate, which measures the number of jobs in non agricultural sectors. Since it measures the condition of manufacturing, services, and other industries, nonfarm payroll is thought to be the pulse of the U.S. economy.
On this front, the Bureau of Industry and Securities spelled out good news for the staffing industry. In a May 2022 report, the BIS outlined that nonfarm payroll increased in 11 U.S. states and remain unchanged in 39 others during April over March. More importantly, the bureau also outlined that over the year the nonfarm payroll employment increased in 49 states and remained unchanged in only one. Annually, it was California that led the pack in April, as its unemployment rate dropped by 3.7% to 4.6% in April 2022.
Taking a slightly deeper look into the staffing industry, and focusing on the information technology sector that consists of firms such as Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), and Alphabet Inc. (NASDAQ:GOOG), the IT staffing sector was worth $32.5 billion last year, and it is expected to grow to $44 billion by 2027 at a compounded annual growth rate (CAGR) of 5.05% according to research from Arizton.
Photo by Campaign Creators on Unsplash
Our Methodology
In order to pick some of the best staffing industry stocks out there, we took a bird’s eye look at the industry to sift out some of the top performers. These were then analyzed through their earnings reports, analyst ratings, large shareholders, relevant industry news, and hedge fund sentiment courtesy of the 912 funds that were part of Insider Monkey’s Q1 2022 survey.
Best Staffing Company Stocks To Invest In
10. Hudson Global, Inc. (NASDAQ:HSON)
Number of Hedge Fund Holders: 3
Hudson Global, Inc. (NASDAQ:HSON) is an American firm that is headquartered in Old Greenwich, Connecticut. The company provides human resource acquisition services to businesses and the government. The company connects both permanent and contractual workers, and its portfolio of services covers both regular employment and temporary hiring for time bound projects.
As part of its fiscal first quarter results, Hudson Global, Inc. (NASDAQ:HSON) reported in May 2022 that it had earned $51.9 million in revenue and $1.23 in non-GAAP EPS. This enabled the company to beat analyst EPS estimates, and at the same time, its revenue grew by 50.6% annually – marking a strong return after the pandemic induced downturn in the industry.
In November 2021, Hudson Global, Inc. (NASDAQ:HSON) acquired another recruitment services provider that connects job seekers in Asia with American companies. Additionally, a key strong point of the company is its exclusive focus on the recruitment processing outsourcing (RPO) market over the last couple of years. This market is expected to grow by many quarters at a 10%-15% CAGR over the next couple of years, and Hudson Global, Inc. (NASDAQ:HSON) is the only independent company operating in the sector, with others being divisions of larger companies.
Insider Monkey’s survey of 912 top hedge funds for Q1 2022 revealed that three had bought a stake in the company.
Jim Simons’s Renaissance Technologies is Hudson Global, Inc. (NASDAQ:HSON)’s largest shareholder through owning 102,311 shares that are worth $4 million.
Hudson Global, Inc. (NASDAQ:HSON) is one staffing firm part of an industry that caters to the needs of major companies such as Microsoft Corporation (NASDAQ:MSFT), Apple Inc. (NASDAQ:AAPL), and Alphabet Inc. (NASDAQ:GOOG).
9. BGSF, Inc. (NYSE:BGSF)
Number of Hedge Fund Holders: 4
BGSF, Inc. (NYSE:BGSF) is an American placement services provider based in Plano, Texas. The company targets the real estate investment trust (REIT) industry and it also connects businesses with individuals adept at using workplace software such as Oracle and SAP. The company has a diverse list of clients, which covers Fortune 500 firms alongside small and medium sized businesses.
BGSF, Inc. (NYSE:BGSF) was another staffing company that not only beat analyst estimates but also grew its revenues in its latest fiscal quarter. The company’s fiscal Q1 earnings, released in April 2022, saw it post $68 million in revenue and $0.35 in non-GAAP EPS.
BGSF, Inc. (NYSE:BGSF) is also one of the few staffing companies out there that are expected to profit from the recovery of the real estate sector. It is the only publicly listed staffing company that targets the real estate sector in the U.S., and demand for office workers and frontline staff should rise as the pandemic lockdowns become a thing of the past. Additionally, BGSF, Inc. (NYSE:BGSF) is one of the largest staffing companies that target the information technology industry in the United States.
The earnings result followed a dividend increase to 15 cents that was payable to shareholders of record in February 2022. Of the 912 hedge funds polled by Insider Monkey for this year’s first quarter, four had held the company’s shares.
8. Resources Connection, Inc. (NASDAQ:RGP)
Number of Hedge Fund Holders: 19
Resources Connection, Inc. (NASDAQ:RGP) is a diversified consulting services firm. It is based in Irvine, California, United States. The company offers a host of services to businesses, which include restructuring, compliance, and transformation of business segments.
Baird increased Resources Connection, Inc. (NASDAQ:RGP)’s price target to $22 from $19 in January 2022, as it shared its belief that changes in the economy will bode well for the company. These include several factors such as inflation, tight labor markets, and remote working — all of which should serve to help the overall staffing industry as well. 19 out of the 912 hedge funds profiled by Insider Monkey for this year’s March quarter had invested in the company.
One of the strongest points about Resources Connection, Inc. (NASDAQ:RGP) is its dividend yield. As of March 2022, this was around 3.51%, more than double the industry average of 1.41%.
Resources Connection, Inc. (NASDAQ:RGP) raked in $204 million in revenue and $0.65 in non-GAAP EPS for its fiscal Q3, beating analyst estimates for both metrics. Its revenue marked a 30.6% growth, boosting hopes of a sector recovery.
Resources Connection, Inc. (NASDAQ:RGP)’s largest investor is Chuck Royce’s Royce & Associates which owns 884,998 shares that are worth $15 million.
7. Kforce Inc. (NASDAQ:KFRC)
Number of Hedge Fund Holders: 19
Kforce Inc. (NASDAQ:KFRC) is a staffing services provider that serves the information technology, finance, and accounting industries. Its services include the firm offering its clients talent acquisition for high skill areas such as machine learning, data analytics, and project management, and in low skill areas such as customer support, data entry, and office assistantship.
For its fiscal Q1, Kforce Inc. (NASDAQ:KFRC) reported $417 million in revenue and $0.93 in GAAP EPS, beating analyst revenue estimates and growing them by 14.8%. For its current quarter, the firm hopes to further grow its revenue to range between $436 million and $444 million.
Kforce Inc. (NASDAQ:KFRC) is also on a path to EPS growth, which might not be reflected in its current share price. The lower end of analyst estimates for full fiscal year EPS places it at $4.21/share, marking a 19% growth. Combined with the fact that the company has also grown its dividend payouts significantly recently, it appears to be an attractive pick for the long term investor.
Citing optimism for information technology staffing, Truist raised Kforce Inc. (NASDAQ:KFRC)’s price target to $80 from $70 in February 2022 as it explained that the company has continued to gain market share consistently for the past two years. Insider Monkey scanned 912 hedge fund portfolios for Q1 2022 and discovered that 19 had bought a stake in the company.
Peter Rathjens, Bruce Clarke, and John Campbell’s Arrowstreet Capital is Kforce Inc. (NASDAQ:KFRC)’s largest investor. It owns 109,420 shares that are worth $8 million.
6. Cross Country Healthcare, Inc. (NASDAQ:CCRN)
Number of Hedge Fund Holders: 22
Cross Country Healthcare, Inc. (NASDAQ:CCRN) is a talent management provider based in Boca Raton, Florida, United States. It exclusively targets the healthcare sector and provides its services to those that require both nurses and physicians. Additionally, it also provides retained search services and workforce solutions.
Barrington increased Cross Country Healthcare, Inc. (NASDAQ:CCRN)’s share price target to $44 from $33 in April 2022. It justified the decision by stating that strong business momentum combined with an impressive earnings performance make the stock an attractive pick.
Cross Country Healthcare, Inc. (NASDAQ:CCRN) brought in $788 million in revenue and $1.7 in non-GAAP EPS for its first fiscal quarter, allowing it to once again beat analyst estimates. 22 funds in Insider Monkey’s database of 912 funds had stakes in the company as of the end of March.
These fiscal quarter results were the among the strongest delivered by any staffing company out there, as they saw Cross Country Healthcare, Inc. (NASDAQ:CCRN) grow its revenue by 139% and earnings by 218% annually, and revenue by an eye popping 309% over the first quarter of 2019.
Cross Country Healthcare, Inc. (NASDAQ:CCRN)’s largest investor is Richard Driehaus’s Driehaus Capital which owns 1.3 million shares that are worth $28.7 million.
Cross Country Healthcare, Inc. (NASDAQ:CCRN) joins an industry comprised of staffing firms that meet the needs of companies the likes of Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), and Alphabet Inc. (NASDAQ:GOOG).
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Disclosure: None. 10 Best Staffing Company Stocks To Invest In is originally published on Insider Monkey.
