SFN Group’s (SFN) shares popped 15% on Thursday on a positive earnings release. Q4 revenue increased 20.5% and EPS was $0.17 compared to $0.06 in Q4 2009. Full year EPS was $0.27. The staffing industry has seen quite a turnaround in the last few quarters, and SFN has been a beneficiary of that. After posting a loss in Q1, it's steadily increased earnings over the past three quarters.
SFN Group is a staffing firm formerly known as Spherion. It has two segments: Temporary staffing and permanent placements. It operates under the names SFN Group, Spherion, Sourceright, Technisource, The Mergis Group, Today's Office Professionals, Emerging Workforce, and SourceRight Solutions. Last year SFN closed the purchase of Tatum, which is an executive services firm focusing on the CFO position.
A cursory look at the company indicates that shares are expensive. The stock hasn’t been at this price level since 2002, but management is bullish. CEO Roy Krause says trends are improving for professional services, and CFO Teri Miller sees higher demand for permanent placements. As the economy continues to improve and the labor markets have more employment demand, a company like SFN should be a logical beneficiary. The question is whether all of that is already baked into the share price.
To determine that, let’s take a look at some fundamentals. With full year EPS at $0.27, the P/E Ratio is a robust 45. Its earnings have been choppy over the last 10 years, but when SFN has been profitable its PE
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