John Leonard, CFA
Special situations, micro-cap, contrarian, CFA

The Turnaround At Heidrick & Struggles International Might Catch The Attention Of Private Equity Buyers - Again

Company overview

Heidrick & Struggles International (NASDAQ:HSII) provides executive search, culture shaping and leadership consulting services.

Growth story clouded by uncertainty

HSII faced multiple challenges in the past year, especially in the critical personnel area given that executive search is a "people business" more than perhaps any other. In July 2013, the CEO stepped down and the board decided against selling the company after evaluating strategic alternatives. This uncertainty regarding leadership and the future of the company resulted in increased turnover (~20%).

Although the stock recovered from the lows of last summer, the current multiple still reflects lingering (and unwarranted) uncertainty regarding future growth prospects, even though each of the above challenges has been overcome. Last month HSII ...

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