Seeking Alpha
Profile| Send Message| ()  
I recently purchased shares of Robert Half International, Inc., (RHI) for $32.53 (on Aug 4th).

Robert Half International Inc., provides specialized staffing and risk consulting services worldwide. The company operates in three segments: Temporary and Consultant Staffing, Permanent Placement Staffing, and Risk Consulting and Internal Audit Services. The Temporary and Consultant Staffing segment provides specialized staffing for various positions in the accounting and finance, administrative and office, information technology, legal, advertising, marketing, and Web design fields, such as creative directors, graphics designers, Web content developers, Web designers, media buyers, and public relations specialists.

RHI's Free Cash Margin is at its highest over last 15 quarters and it Profit Margin is at its highest over the last 20 quarters. Yet its Price to Free Cash Flow Ratio [P/FC] of 19.8 is near a 20 quarter low. RHI's annualized Free Cash Flow grew by 63% over its latest 12 months. For these reasons and because it is down almost $10 per share from its recent highs, I believe that RHI is a good stock to own in this market.

By looking and understanding the graphs below you will see what I'm talking about.

click charts to enlarge
rhi5

We need to look at the 20 quarter chart to get the real picture.

Here you can see what I'm getting at and why this stock is poised to do well. If you go down to line 9 you will see RHI's Free Cash Margin at 8 for the last two quarters is the highest over last 15 quarters. In addition, on line 8 the Profit Margin at 7.2 is at its highest over the last 20 quarters. However, if you calculated the Price to Free Cash Flow Ratio (P/FC) as of August 10, it stood at 19.9, near a 20 quarter low (look at line 16). On line 11, you can see RHI's annualized Free Cash Flow grew by 63% over its latest 12 months.

RHI20

Due to the fundamentals shown here this stocks will hold its own over the market sell off and will explode when the sell off reverses.

RHI 1-yr chart:

RHI 1-yr

Please take the time to read through the tutorial. It is free and will help you understand why I pick the stocks I pick.

Source: RHI's Cash Flow Growth Makes it a Sound Long Pick