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Aggressive Growth

Robert Half (RHI - Analyst Report) is coming off a strong positive earnings surprise and is a Zacks #1 Rank (Strong Buy).

Company Description

Robert Half International provides staffing and risk consulting services. Its Accountemps division offers temporary staffing in the fields of accounting, tax, and finance. The company's OfficeTeam division places temporary and full-time office and administrative personnel, ranging from word processors to office managers. Robert Half International Inc. was founded in 1948 and is headquartered in Menlo Park, California.

Robert Half Beats Estimates in six of Seven Quarters

Robert Half topped the Zacks Consensus Estimate in six of the last seven quarters. The average beat, including the quarter that came in $0.01 below expectations, of $0.02 translates to a nearly 9% positive earnings surprise. The stock has moved higher by an average of 1.9% following the earnings releases.

The December 2011 quarter was the lone miss of the Zacks Consensus Estimate as the company reported $0.30, $0.01 less than expected. The company also missed on the topline in reporting $973 million in revenue, approximately $17 million below expectations. In the session following the earnings release, the stock traded lower by more than 8%.

Robert Half - ticker RHI>
 
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Robert Half's Most Recent Reported Earnings

On April 24, 2012 Robert Half reported revenue of $1.015 billion up from $881 million reported in year ago quarter, an increase of 15%. Earnings per share came in at $0.34 compared to $0.18 in the year ago period, an increase of 89%. In the session following the earnings release, the stock traded higher by more than 7%.

Robert Half Sees Estimates Moving Higher

Estimates for Robert Half have been rising of late. The Zacks Consensus Estimate for 2012 for Robert Half stood at $1.35 as of January 2012. The consensus has thus moved higher to $1.47. Over the same time period estimates for 2013 have moved from $1.17 to $1.83. The implied earnings growth rate of more than 24% is just what aggressive growth investors are look for.

Valuation

Robert Half trades higher than the industry average for nearly every metric that aggressive growth investors tend to focus on. The trailing twelve months PE of 23x is modestly higher than the 16x industry average, while the forward PE of 19x is closer to the industry average of 14x. The price to book multiple of nearly 5x for Robert Half is nearly double the industry average of 2.6x. The lone metric that shows the company trading at a discount is the 1x price to sales multiple compared to a 2x industry average.

The Chart

A quick look at the price and consensus chart shows an earnings picture that is mostly improving steadily since the 2009 rescission. As earnings expectations tailed off in 2008 for the 2009 year, the stock followed suit. 2010 and 2011 saw solid earnings estimate increase as did 2012. The 2013 line appears to have been artificially low, most likely due to a single estimate that was never revised. The gaps in the earnings lines showcase the consistent earnings growth, something that aggressive growth investors usually look for. Robert Half is a Zacks #1 Rank (Strong Buy).

Robert Half - ticker RHI>
 
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Brian Bolan is the Aggressive Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the Zacks Home Run Investor service

Follow Brian Bolan on twitter at @BBolan1

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