RHI

Robert Half International Inc.

Finance/Real Estate


Presented:10/28/2021
Price:$112.38
Cap:$12.58B
Current Price:$67.65
Cap:$7.04B

Presented

Date10/28/2021
Price$112.38
Market Cap$12.58B
Ent Value$10.82B
P/E Ratio23.99x
Book Value$11.83
Div Yield1.32%
Shares O/S111.97M
Ave Daily Vol621,726
Short Int3.42%

Current

Price$67.65
Market Cap$7.04B
Robert Half International, Inc. engages in the provision of staffing and risk consulting services. It operates through the following segments: Temporary and Consultant Staffing, Permanent Placement Staffing and Risk Consulting & Internal Audit Services. The Temporary and Consultant Staffing segment offers staffing in the accounting and finance, administrative and office, information technology, legal, advertising, marketing, and web design fields. The Permanent Placement Staffing segment provides full-time personnel in the accounting, finance, administrative & office and information technology fields. The Risk Consulting and Internal Audit Services segment comprises business and technology risk consulting and internal audit services. The company was founded by Robert Half in 1948 and is headquartered in Menlo Park, CA.

Publicly traded companies mentioned herein: Robert Half International Inc (RHI)

Highlights

The presenter is short shares of Robert Half International Inc (RHI), the ~$13B market cap staffing firm that has historically specialized in temporary employment within accounting and finance. RHI also does permanent placement and a consulting business (Risk Consulting & Internal Audit Services), but the temp business has historically accounted for 60% – 70% of EBIT; of that temp work, the majority is data entry, bookkeeping, and executive assistance. While some may question whether it is wise to short a staffing firm given the current labor environment, he highlights two issues: first, the current labor market is more bullish for blue collar jobs, whereas RHI is mainly white collar; second, RHI is also having a tough time filling jobs, forcing the company to hire more recruiters at the expense of margins. Most importantly, however, the presenter points to transitory work in the public sector that will fall off. The stock currently trades at $113 per share, and he sees downside to $60 – $75 based on these dynamics. 

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Idea Discussion

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