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Negative sentiment surrounding the corporate staffing industry amid credit-market woes and the possibility of a U.S. recession has seen shares of leading recruiter Robert Half International Inc. (NYSE:RHI) drop 38% since February. Barron's says the decline looks overdone. While economists peg the odds of a 2008 recession at about 30%, the decline in staffing stocks reflects a 75% probability, analysts say. Furthermore, a recent poll showed 10% of 1,400 companies surveyed expect to add accounting/finance staffers (Half's specialty) in 2008, while only 4% foresee job cuts. Despite its share decline, Half is enjoying a strong year, with overall revenue increases of 15%, including a 17.5% gain at its largest unit ("Accounttemps"), and EPS up over 8%. Half has almost no debt and $329M in cash, which should allow it to continue share buybacks. Shares trade at a low 14.7x 2007 earnings and an even lower 12.8x 2008 estimated earnings.

Deutsche Bank analyst Brandt Sakakeeny says he's shocked by the beating Half has taken: "Never have I seen a cyclical stock trading at such a low level relative to the 2008 and '09 numbers that I expect to see. This company has a great track record and superior management, qualities that I think will allow it to weather -- and continue to invest through -- any downturn," he says. Shares ($26) should rebound to $40 next year. Barron's says they won't be this cheap forever.

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Source: Corporate Staffer Robert Half Is a Total Bargain - Barron's