RHI

Robert Half International Inc

Finance/Real Estate


Presented:07/25/2018
Price:$74.51
Cap:$9.21B
Current Price:$67.65
Cap:$7.04B

Presented

Date07/25/2018
Price$74.51
Market Cap$9.21B
Ent Value$6.82B
P/E Ratio27.29x
Book Value$9.02
Div Yield1.5%
Shares O/S123.56M
Ave Daily Vol1,127,663
Short Int5.30%

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 and 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 includes full-time personnel in the accounting, finance, administrative and 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), ManpowerGroup Inc (MAN)

Highlights

The presenter is short Robert Half International (RHI) stock at $73. The risk/reward appears to be skewed in favor of bears with the market ascribing a 20x multiple to what could end up being peak earnings of ~$3.80 - $4 per share in 2019 (if the consensus is accurate). Trends are good today, with the US economy strong and unemployment below 4%, but staffing businesses tend to cycle, and organic revenue and EBIT growth of ~7% and 10%, respectively, are about as good as can be expected. When there is a fear of growth slowing, or a recession, the multiple tends to collapse (i.e., to ~10x, which is where ManpowerGroup presently trades). In a scenario where revenue declines, the impact on earnings is magnified due to the inherent leverage in the business. RHI shares could be very volatile, with 40% - 50% downside risk over the next 12 - 24 months.

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Idea Discussion

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