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Are We Singing From the Same Page When I Say this Firm Could Just Be the Job?

By Malcolm Stacey | Tuesday 18 April 2017

Disclosure: I own shares in one or more of the stocks mentioned. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.

Hello Share Spooners. I’ve long held that recruitment agencies are a decent bet in these turbulent times. The reason is that unemployment seems to be on the back foot in various parts of the globe, including here in Blighty.

We were all encouraged recently to hear the latest jobs figures in Britain, showing once again a broken record for the number of jobs in existence.

One of my favourite shares in the recruitment game is Impellam (IPEL). And that little share has been coursing ahead of late. But if I were to buy shares in jobs consultancies now, I think I would plump for Page Group (PAGE).

I am moved to buy Page partly because the Honkers Bonkers Bank says its policies justify a higher multiple for its shares than those for its peers. The bank is expecting increasing growth.

Page Group is certainly doing a lot better nowadays. Gross profit rose by 9% to a record £170m for the first three months of 2017. During the previous quarter it gained only 3.8%. It has a strong balance sheet with net cash of £86 million.

So we have a company which is year by year growing its profits. That is one of the better signs for future share price hikes that you can have. Then throw in the fact that the labour supply is being mopped up, so that companies need to rely more and more on agencies to fill posts.

Those of you who are nervous about the near future effects of Brexit on all company profits, may not want to over invest in recruitment consultancies like Page. But for those who agree with me that business should not suffer because of EU estrangement - and may even improve - then this is one that could go on your ‘buy’ list. 

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