Looking for extra income? Consider trading the shares of this staffing company
Not all big investment returns come from tech stocks.
Real-money columnist Paul Price favors well-researched companies with solid businesses and clear trading cycles that simultaneously reduce risk while increasing returns.
“Some stocks are made to be traded,” Price recently wrote on Real Money. “Workforce solutions provider ManpowerGroup is one of them.”
ManpowerGroup (MAN) – Get the report from ManpowerGroup Inc. describes itself as providing “workforce solutions, connecting human potential with business power”. In simple terms, this means that the company helps companies find staff. They work at almost every level, from temporary workers to professionals and consultants, and are one of the largest recruitment companies in the world.
This kind of size usually comes with great stability, and ManpowerGroup was no different in this regard.
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“The company’s long-term performance was stable across all major business metrics,” Price wrote. Metrics such as revenue, cash flow, sales and even shareholder dividends have all grown at a steady and comfortable pace.
This makes MAN a good stock to own, but not necessarily a good one to buy. With a visibly strong and successful company, stock prices are usually just as strong. ManpowerGroup is no exception, its price having increased from $56.72 to $93.97 per share over a period of about 10 years. Still, Price considers this title a bargain.
“Since June 2012, there have been five major cyclical ups in stocks and five cyclical downs. The asymmetric nature of stock trading, however, has been proven once again during each of these swings.”
Price noted that “the average decline was (-42.4%) and lasted approximately 10.6 months. The average rebound from the previous low was +119% over approximately 14.4 months…Each time an action gives me almost 3 to 1 reward versus risk, I’m a happy man, better yet, there were plenty of warning signs to avoid owning Manpower at its peak.