) and Monster Worldwide (MNST
) are way off their earlier 2004 highs. Some analysts are convinced that the sell-off is overdone. "I worry about how oil prices will impact jobs," says Randall Mehl of investment firm Robert W. Baird. "But the market is ignoring the steady recovery we've had."
Profits at Manpower, the world's second-largest staffing company, rose 83% in the second quarter, to $53.1 million, or 56 cents a share -- on revenues of $3.6 billion, up 20%. That beat the Street's estimates of 52 cents, according to Thomson First Call. Although it typically trades at a price-earnings ratio of 20 during a recovery, says Mehl, the stock is hovering at 14 times his "very achievable" 2005 estimate of $2.70. His 12-month target for the stock, now at 42, is 58. The same prospects could face Net job-search company Monster, first mentioned in this column in May, 2003. Then at 17, the stock jumped to 29 but has since slumped to 20.51. Mehl's current target is 32. "Lower jobless claims and fewer layoffs give me confidence that we are still creating a material number of jobs," adds analyst Marta Nichols of Banc of America Securities (BAC
). She pegs Manpower at 55 and Monster at 30.Gene Marcial will be back next week.
Note: 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 Mara Der Hovanesian