TrueBlue Shares Popped: What You Need to Know
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of staffing services company TrueBlue (NYS: TBI) are shooting up 14% today following its second-quarter earnings report.
So what: Apparently the unemployment picture isn't as dire as the U.S. Labor Department would have you believe -- at least if you consider the figures TrueBlue just reported. For the quarter, the blue-collar staffer reported a profit of $0.20 on revenue of $320 million. While revenue was in line with consensus estimates, its profit beat estimates by $0.02. More importantly, the company sees "third-quarter growth accelerating," in its own words. TrueBlue's third-quarter revenue guidance of $360 million to $370 million and an EPS projection of $0.27-$0.32 easily trumps current Wall Street estimates.
Now what: Much of the staffing sector appears relatively inexpensive. Manpower (NYS: MAN) is valued at just 12 times forward earnings with a PEG ratio below 1. Likewise, Kelly Services (NAS: KELYA) currently trades below book value despite a PEG ratio below 1 and a forward P/E of only 9.5. TrueBlue has the most aggressive valuation of the bunch, but it appears to be growing the quickest. It also has a cash-rich balance sheet free of debt, which its competitors can't claim. After today's pop, I wouldn't say the company's a bargain anymore, but it definitely deserves a place on your watchlist.
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At the time thisarticle was published Fool contributorSean Williamshas no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen nameTMFUltraLong. Motley Fool newsletter services have recommended shorting Kelly Services. Try any of our Foolish newsletter servicesfree for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has adisclosure policy.
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