3 Staffing Stocks to Watch Amid Growing Challenges
U.S. job growth has somewhat slowed but companies are still hiring at an aggressive pace. This once again saw solid job additions in December. The continued strength in the jobs market comes as the Fed struggles to cool down job additions and bring down inflation.
The fact is that there are a record number of job openings and demand is high, which is making employers continue with the hiring spree. Given this scenario, staffing firms like Kforce Inc. (KFRC), Cross Country Healthcare, Inc. CCRN and Randstad N.V. RANJY are likely to benefit in the near term.
Hiring Continues at Solid Pace
The U.S. economy added 223,000 jobs in December, according to the latest Labor Department report. The unemployment rate declined to 3.5%, which is now in line with the pre-pandemic levels.
Although job growth has slowed lately, the December figures are still quite impressive. The government jobs report comes after Automatic Data Processing, Inc. ADP, the U.S. highest payroll supplier, said that job additions by private employers increased by 235,000 in December. This number, too, is lower than the November figure but still quite high.
The Fed has been struggling to cool hiring and the growth somewhat slowed in the second half of last year but overall job additions remained solid in 2022. The U.S. economy added 539,000 jobs on average in the first three months of the year, which gradually slowed. Still, there were 4.5 million job additions to the economy in 2020.
This is the second-best year on record after the economy added a staggering 6.7 million jobs in 2021, a solid rebound from a record 9.3 million job losses in 2020.
The Fed, in its fight to bring down inflation, has been aggressively increasing interest rates but has struggled to cool the labor market. December’s job additions came in sharply lower than November, which helped markets rebound earlier this month.
However, there is little evidence that there will be enough of a boost in the labor force to help cool off the job market. Job growth remains far above pre-pandemic levels, with job additions averaging 164,000 in 2019 and the unemployment rate returning to a 50-year low.
This indicates that the demand for jobs is still high and both the government and private employers are filling up vacancies.
Stocks to Watch
Given this situation, it makes for an ideal opportunity to invest in staffing stocks.
Kforce Inc. and its subsidiaries provide professional staffing services and solutions to clients on both a temporary and permanent basis through its Technology and Finance, and Accounting segments. KFRC’s Tech Segment provides both Flex and Direct Hire services to clients, focusing primarily on areas of information technology such as systems/applications architecture and development, data management, business and artificial intelligence, machine learning and network architecture and security.
Kforce’s expected earnings growth rate for the current year is 19.8%. The Zacks Consensus Estimate for current-year earnings has improved 1.9% over the past 90 days. KFRC has a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Cross Country Healthcare, Inc. is a national leader in providing innovative healthcare workforce solutions and staffing services. CCRN’s diverse client base includes both clinical and nonclinical settings, servicing acute care hospitals, physician practice groups, outpatient and ambulatory-care centers, nursing facilities, both public schools and charter schools, rehabilitation and sports medicine clinics, government facilities, and homecare. Cross Country Healthcare is able to place clinicians on travel and per diem assignments, local short-term contracts and permanent positions.
Cross Country Healthcare’s expected earnings growth rate for the current year is 65.7%. The Zacks Consensus Estimate for current-year earnings has improved 5.6% over the past 90 days. CCRN has a Zacks Rank #3 (Hold).
Randstad N.V. operates as a global provider of HR services, including temporary staffing, permanent placement, recruitment of middle and senior managers, onsite consulting, seconded specialists and specialized HR services. RANJY also recruits supervisors, managers, professionals, interim specialists and consultants with professional qualifications for middle and senior management positions.
Randstad N.V.’s expected earnings growth rate for the current year is 5.1%. The Zacks Consensus Estimate for current-year earnings has improved 10.2% over the past 90 days. RANJY has a Zacks Rank #1.
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