Monster Worldwide (MNST), formerly TMP Worldwide (TWPW), is betting all its chips on the power of the Internet -- and it's paying off. In a Mar. 31 spin-off, the company dumped its staffing and headhunting arm, leaving it with online recruitment portal Monster.com, which pairs companies with job-seekers in 21 countries. Its database has 20 million r?sum?s.
On Apr. 30, Monster jumped from 13 to 16.76 when it reported better-than-expected first-quarter results -- thanks to buoyant Monster.com figures, even in the anemic labor market. The stock's rise was helped by short-covering -- buys by those who had expected the stock to fall. Monster still owns ad and direct-marketing units. The spin-off got rid of TMP's worst assets, says Joe Cornell of Spin-Off Research, who describes Monster.com as the company's crown jewel, delivering 80% of revenues. Cornell says when the economy perks up, Monster will take off. It earns fees for recruiting for the blue chips.
Cornell sees the stock at 21 this year. He figures Monster will earn 40 cents a share on sales of $685 million in 2003, and 50 cents on $735 million in 2004. Lanny Baker of Smith Barney says Monster is "one of the most attractive alternatives in the Internet sector."
Unless otherwise noted, neither the sources cited in Inside Wall Street nor their firms hold positions in the stocks under discussion. Similarly, they have no investment banking or other financial relationships with them. By Gene G. Marcial