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Momentum

Korn/Ferry International (KFY - Snapshot Report) looks like a serious momentum player. Its share price just jumped to a 2-year high as companies begin to hire out of the recession. With another good quarter in the bag and a bullish growth projection, this Zacks #1 rank stock clears the momentum interview.

What Do They Do?

Korn/Ferry is sort of a hybrid company, half talent agency and half executive recruiting services. The company has been around since 1969 and has a market cap of just over $1 billion.

Korn/Ferry is looking like an early benefactor of the job growth that many analysts are looking for in 2011. The company's share price just jumped to a new multi-year high after its Q2 results came in well ahead of expectations.

Second-Quarter Results

Fee revenue, comprising 95% of the company's total revenue, was up 32% from last year to $185 million. This was the groups sixth consecutive quarter of growth.

Earnings came in at 33 cents, 37% ahead of the Zacks Consensus Estimate, lifting the company's average earnings surprise to 35% over the last three quarters.

That increase in sales hit the bottom line hard, with operating income spiking to $20 million from $2 million last year..

Domestic vs International

Providing some texture to the results, CEO Gary Burnison said that the company is seeing a very two-tiered recovery, with emerging market companies hiring and adding jobs while the more developed, western economy countries maintain a cautious outlook.

Finanacial Profile

With cash and short-term investments of $131 million and no long-term debt, Korn/Ferry also looks strong on the balance sheet.

Estimates

We saw some pretty solid movement in estimates off the good quarter, with the current year up 19 cents to $1.17. The next-year estimate is pegged at $1.37, a bullish 17% growth projection.

Valuation

But in spite of recent gains, the valuation picture still looks reasonable, with a forward PEG (PE/growth) ratio of 1.17.

2-Year Chart

On the chart, shares jumped higher in early December after the company reported another great quarter, hitting a new multi-year high on the news. Although shares could be a little over extended in the short-run, the longer term trend is bullish too. Take a look below.

Last Week's Momentum Zacks Rank Buy Stocks

AGCO Corp. (AGCO) recently hit a new all-time high of $51.51 after rallying for most of the last 5 months on higher agriculture prices. With a compelling valuation and bullish growth projection, this Zacks #1 rank stock has harvested plenty of momentum for itself. Read Full Article.

Clayton Williams Energy, Inc. (CWEI) has been surging since early September, recently hitting a new multi-year high at $84.76 as crude crosses the $90 mark. With a bullish next-year estimate calling for 65% earnings growth and a compelling valuation, this Zacks #1 stock is providing plenty of fuel for its upward momentum. Read Full Article.

Precision Drilling Corp. (PDS) recently hit a new multi-year high at $9.85 after reporting an impressive Q3 earnings surprise of 122% in late October. Estimates have since jumped higher, with the next-year estimate now projecting 71% earnings growth, providing plenty of momentum for this Zacks #1 rank stock. Read Full Article.

Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Momentum Trader Service.

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