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My scope is to assist private companies both abroad and domestic wishing to go public in the U.S. We invest in the company in the earliest stages, and assist in coordinating their audit, legal RTO or IPO. We also offer M&A identification, execution and consulting, Investors relations... More
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  • Can This Staffing Company Regain Lost Ground? 0 comments
    Jul 8, 2014 7:07 AM | about stocks: KELYA

    As the Dow flirts with 17,000, investors again turn to safety assets. Valuation fears, potential political backlash with the loss of number two Republican Eric Cantor, and the recent al Qaeda offensive in Iraq are major concerns for the market moving forward. The Iraq situation is particularly an issue as militants eye a Baghdad assault in a time when Iraqi politicians ask for American assistance. American officials have ruled out a third ground invasion of country for now, in favor of using drones and warplanes. However, as the number two producer of oil in the world and fifth in reserves, the potential toppling of the Iraqi government could send oil and gas higher. This, of course, could have major repercussions on the American economy as consumers already face higher prices of oil due to seasonality. As we continue to face uncertainties ahead, it continues to be more and more important to check up on your investments and cut exposure to overly risky assets. One stock we will review today is a staffing and outsourcing company, Kelly Services, Inc. (NASDAQ: KELYA).

    Turning to the fundamentals, Kelly Services has a market cap of $684.92 million and is currently rated a 'strong buy' by analysts. Kelly has a price to earnings of 11.85 and forward price to earnings of 10.16. Price earnings growth is undervalued at .74, price to sales is undervalued at .13, price to book is undervalued at .83, price to cash is at 5.45, and price to free cash flow is at 7.81. The company has limited debt with total debt to equity at .03 and cash per share at 3.35, giving the company a current ratio of 1.60.

    Earnings are expected to increase 17.6 percent this year, 102.6 percent next year, and 16 percent over the next five years. Kelly Services pays out an annual dividend yield of 1.10 percent and is up 5.86 percent in the past year, while being down 26.5 percent year-to-date.

    Since the stock hit its March high of $26, the price action has struggled to hold and a severe correction ensued. Kelly Services saw a large demand for its services leading up to the decline due to an Obamacare clause that forces employers who hire more than 30 full time employees to provide health care. This has led to demand in temporary workers and outsourcing services. With growth still excellent, limited debt and undervalued fundamentals, Kelly Services definitely looks enticing around these levels.

    Investors, be sure to do your own research before placing orders.

    Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Stocks: KELYA
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