The nomination of Federal Reserve Vice Chair Janet Yellen to replace Chairman Ben Bernanke is very bullish for the stock market. Yellen is pro-growth, which means she favors the Federal Reserve buying trillions in American Treasury securities and others to finance the US Federal budget deficit. That keeps interest rates low, which helps to keep the stock market high. It also means that the American economy is still viewed as weak, which means that the performance of the $100 billion staffing industry will still be strong.
As detailed in a previous article on this site, companies in the staffing industry such as Paychex (NASDAQ: PAYX), Labor SMART (OCTBB: LTNC), TrueBlue (NYSE: TBI), and Robert Half (NYSE: RHI) have done very well due to changes in the American economy. Businesses prefer to hire temporary workers due to concern about the US economy. As a result, Paychex just reported quarterly results that were very positive. In addition to its business performance, Paychex also pays a 3.54% dividend, which increases the total return for the shareholder.
Those owning the stock of TrueBlue and Robert Half have done very well, too.
For 2013, Robert Half is up by more than 23%. Over the same period, TrueBlue has risen more than 50%. Even with the growth in share price, each stock still has appealing valuations. The price-to-sales ratio for TrueBlue is very attractive, at present.
Labor SMART just turned in a very strong quarter, like Paychex.
As with TrueBlue, Labor SMART operates in the $29 billion demand labor segment of the staffing industry. In addition to record results, Labor SMART is undervalued, like TrueBlue and Robert Half. The revenues for last quarter for Labor SMART were more than the market capitalization of the company. Labor SMART.
Hopefully, Yellen at the head of the Federal Reserve will lead the American economy into a full recovery from The Great Recession. What has more than recovered from The Great Recession is the stock market. Those in the staffing industry have led the bull market stampede since 2009. Investors should expect Paychex, Labor SMART, TrueBlue, Robert Half, and others to continue to do well.