In this article, we will take a look at the 5 best staffing company stocks to buy. For a detailed analysis of these companies, go directly to the 10 Best Staffing Company Stocks to Buy.
5. Paychex, Inc. (NASDAQ: PAYX)
Number of Hedge Fund Holders: 32
Paychex, Inc. (NASDAQ: PAYX) is a New York-based company that provides human resource, payroll, and other services to businesses. It is placed fifth on our list of 10 best staffing company stocks to buy and was founded in 1971. Paychex stock has returned more than 50% to investors over the past year. The firm has operations in Europe in addition to the United States. It mostly serves small or medium-sized entities. It has a market cap of more than $36 billion and posted more than $4 billion in annual revenue in 2020.
Paychex, Inc. (NASDAQ: PAYX) pays a regular dividend and is a top stock for income investors. On April 30, it declared a quarterly dividend of $0.66 per share, a 6.5% increase from the previous dividend of $0.62.
Out of the hedge funds being tracked by Insider Monkey, New York-based investment firm Select Equity Group is a leading shareholder in the firm with 6.5 million shares worth more than $607 million.
4. Korn Ferry (NYSE: KFY)
Number of Hedge Fund Holders: 17
Korn Ferry (NYSE: KFY) is a California-based management consulting firm founded in 1969. It is placed fourth on our list of 10 best staffing company stocks to buy. It has operations in more than 53 countries and employs more than 8,000 people. The firm provides executive level talent as well as mid-tier management solutions. It also has a leadership development program. Korn stock has returned more than 134% to investors over the past year. The firm primarily serves middle market and emerging growth companies.
Korn Ferry (NYSE: KFY) posted earnings for the third fiscal quarter on February 22, reporting a revenue of $477 million, beating market estimates by more than $54 million but down more than 9% compared to the same period last year.
At the end of the fourth quarter of 2020, 17 hedge funds in the database of Insider Monkey held stakes worth $196 million in the firm, down from 21 in the preceding quarter worth $156 million.
In its Q3 2020 investor letter, Third Avenue Management, an asset management firm, highlighted a few stocks and Korn Ferry (NYSE: KFY) was one of them. Here is what the fund said:
“Korn Ferry – Korn Ferry is a company that has historically been known for its market leading position in the executive search industry. This business entails highly sophisticated searches for senior roles at a wide variety of corporations and other organizations. Typical assignments might include the identification and recruitment of CEOs, CFOs or board members. This is a high margin and very lucrative practice for successful companies in this industry. However, Korn Ferry, mostly through a series of acquisitions over a number years, has expanded and diversified its lines of business to include other competencies, such as consulting roles to guide the planning of corporate workforces, the recruitment of large-scale, non C-suite workforces and a variety of educational and training consultations. Korn Ferry has also made strides building a digital business that is capable of monetizing Korn Ferry’s proprietary data, which is one of the world’s most substantial databases of employment and compensation information. The company is run by one of the industry’s most respected CEOs, who has been responsible for the company’s acquisition and diversification strategy and is also substantially aligned with shareholders via a large personal interest in the stock.
Korn Ferry’s issues today appear entirely exogenous to the company and are primarily a function of the COVID-related shutdown. Not surprisingly this has caused a reduction in new business generation for the company, which we believe to be temporary. We view the company to be quite cheap as measured by its valuation relative to any estimate of normalized profit. Furthermore, the combination of a very strong balance sheet and a highly flexible cost structure put the company in a position to endure long bouts of depressed operating conditions, if necessary. We do suspect though that there are several underappreciated factors that may drive a more rapid business recovery than some seem to expect. First, it would not be surprising to see an acceleration of C-suite and board member turnover as companies emerge from the pandemic and adjust previous plans. Similarly, the COVID experience has accelerated a number of pre-existing trends whereby a variety of large-employment industries may not be in a position to re-hire their former workforces for some time while other large-employment industries are finding themselves needing to expand workforces rapidly. Last but not least, Korn Ferry is one of the companies on the front lines of helping companies accomplish their diversity and inclusion goals. Korn Ferry’s employee education and training functions support corporate culture as it relates to diversity and inclusion and the company’s executive search functions are increasingly being called upon to help make boards and c-suites more diverse. It is our sense that this incremental source of demand is lasting and more substantial than may be appreciated today.”
3. Perficient, Inc. (NASDAQ: PRFT)
Number of Hedge Fund Holders:
Perficient, Inc. (NASDAQ: PRFT) is a Missouri-based global digital consultancy firm. It is ranked third on our list of 10 best staffing company stocks to buy and was founded in 1998. Perificient stock has returned more than 110% to investors in the past year. The company primarily operates in North America. Some of the professionals the company links with businesses operate in digital and technology strategy, management consulting, organizational change management, and intelligence solutions areas.
On April 29, Perficient, Inc. (NASDAQ: PRFT) posted earnings for the first three months of 2021, reporting a revenue of $169 million and earnings per share of $0.74. The quarterly revenue was up more than 16% compared to the same period in 2020 and beat market estimates by more than $2.6 million.
Out of the hedge funds being tracked by Insider Monkey, Atlanta-based investment firm Blue Grotto Capital is a leading shareholder in the firm with 415,477 shares worth more than $19 million.
2. Microsoft Corporation (NASDAQ: MSFT)
Number of Hedge Fund Holders: 258
Microsoft Corporation (NASDAQ: MSFT) is a Washington-based technology company that was founded in 1975. It is placed second on our list of 10 best staffing company stocks to buy. The firm owns LinkedIn, the premier social network that focuses on professional profiles and links individuals looking for jobs with businesses seeking to hire them. LinkedIn had 740 million registered members from 150 countries. Microsoft stock has returned more than 32% to investors in the past twelve months.
On May 13, investment advisory Rosenblatt initiated coverage on Microsoft Corporation (NASDAQ: MSFT) stock with a Buy rating and a price target of $301. Microsoft shares jumped more than 2% after the ratings update.
At the end of the fourth quarter of 2020, 258 hedge funds in the database of Insider Monkey held stakes worth $52 billion in the firm, up from 234 in the preceding quarter worth $42 billion.
In its Q1 2021 investor letter, Polen Capital, an investment management firm, highlighted a few stocks and Microsoft Corporation (NASDAQ: MSFT) was one of them. Here is what the fund said:
“We have written extensively about Microsoft in recent commentaries. It was our leading contributor last year and one of our largest weightings within the Portfolio. It continues to experience business momentum through several dominant, essential, and competitively advantaged businesses, like Office 365 and Azure. The markets it competes for are enormous, which gives the company the ability to compound at scale. In the past quarter alone, the company generated over $40 billion in revenue, representing a 17% growth rate. The inherent operating leverage in Microsoft’s business model continues and led to 34% earnings growth this past quarter. Despite the broad rotation we saw in the first quarter and Microsoft’s robust performance in 2020, we think its business fundamentals continue to exhibit strength, and the stock continues to reflect the fundamentals.”
1. 51job, Inc. (NASDAQ: JOBS)
Number of Hedge Fund Holders: 16
51job, Inc. (NASDAQ: JOBS) is a Shanghai-based human resource firm that was founded in 1998. It is placed first on our list of 10 best staffing company stocks to buy. The stock has returned more than 15% to investors over the past year. The firm primarily operates in China and offers workforce solutions through several brands, including 51job.com, yingjiesheng.com, 51jingying.com, lagou.com, and 51mdd.com. It has a market cap of close to $5 billion and posted more than $560 million in annual revenue in 2020.
On May 4, 51job, Inc. (NASDAQ: JOBS) stock surged more than 14% after a proposal by DCP Services Limited, Ocean Link Partners Limited, and Rick Yan, the CEO of the company, to acquire all outstanding shares of the firm.
Out of the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Pentwater Capital Management is a leading shareholder in the firm with 300,000 shares worth close to $21 million.
You can also take a peek at 10 Best Travel Stocks to Buy Right Now, and 10 Best Automotive Stocks to Invest in Now.
