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Can This Stock Rise With Obamacare?

|Includes: DHI Group, Inc. (DHX)

It is all over the news. Report after report of Obamacare and its failed website launch, insurance plans being cancelled, Obama reinstating the cancelled policies, and it goes on. House Republicans have consistently tried to derail the program with limited success. However, these latest developments have caused some House Democrats to defect to the Republican-backed cause of replacing the President's healthcare legislation. It will be interesting to see whether or not the Senate, which is Democrat controlled, will start to defect against the President's healthcare program as well. However, political analysts do not see this as likely. So that means we can (more likely than not) expect the healthcare law to still be in place after opponents attempt to knock it down.

Whether you agree with the law or not, I think it's safe to say that everyone would like ways to profit from it. One of the key arguments of people against the law is the fact that employers will have to supply employees' healthcare coverage that meet full time working requirements. This has caused employers to lay off full time workers in favor of outsourcing and temporary staffing. Under the law, employers do not have to supply coverage to these workers. So, how do we profit from that information? Buy companies that supply the outsourcing and temporary staffing

One such company is Dice Holdings, Inc. (NYSE: DHX). Dice Holdings is a company that has a variety of different platforms to promote outsourcing and temporary staffing solutions to businesses. As this mandate goes into law, I suspect Dice Holdings could see an uptick in business and ultimately a higher share price.

The company has a market cap of $423.98 million and currently is rated a "hold" from analysts. Price to earnings currently stands at 14.69 and forward price to earnings is at 14.52. Price earnings growth (NYSE:PEG) stands at 1.55, price to sales is at 2.04, price to book at 2.26, and price to cash is at 9.48. These valuation figures are considered to be fairly valued and do not show a discount. Price to free cash flow is at 10.39, however Dice has a total debt to equity of .32 and only .79 cash per share. Earnings are expected to rise 20.4 percent this year, 5.95 percent next year, and 9.5 percent over the next five years. Margins are good with a gross margin of 89.4 percent, operating margin of 24.3 percent, and a profit margin of 15 percent.

Let me be clear that this is would be considered a highly speculative holding, should your research determine that this play is right for you. There is no certainty that this mandate will survive the attempts to change it, so it is imperative that you keep a close eye on any developments there. Additionally, Dice does have a lower current ratio than I would like, but this is a watch list candidate. As of right now the mandate is expected to go into effect next year, but that could change.