The tech sector is booming.
Companies are hiring at a rapid pace. Tech hiring has helped push the unemployment rate down from nearly 16% at the height of the pandemic in April 2020 to only 4.6% last month.
But hiring within tech isn’t easy. Human resource departments need help.
Specialized staffing agencies help these companies find the best candidates for the most complex positions.
And they can be great to invest in as well …
Using Adam O’Dell’s six-factor Green Zone Ratings system, I found a company that specializes in technology employment services. It rates in the green across all six factors we use to analyze stocks.
The stock has risen nearly 100% in the last year. And I think it will go even higher.
We are “Strong Bullish” on this stock, which means it is poised to outperform the broader market by at least three times over the next 12 months.
Let’s see why investors should buy this labor force stock now.
No Slowdown for Technology Sector Hiring
Jobs in the technology sector are in demand and pay well.
The median pay for jobs in the tech sector was more than $80,000 per year in 2020.
Demand creates extra strain on human resource departments searching for the right candidates to fill these jobs.
And job demand within the tech sector isn’t expected to slow anytime soon.
According to a 2021 report from CompTIA and the Bureau of Labor Statistics, there were approximately 5.2 million tech sector employees in the U.S. in 2020.
That number should reach 6 million by 2030 — a 14% increase in total technology employment.
Investors can find big profits in this trend.
Servicing Technology Employment Needs: Kforce Inc.
Kforce Inc. (Nasdaq: KFRC) is a professional staffing agency focused on the technology and financial services industry.
In the tech sector, Kforce provides temporary and permanent staffing in the areas of:
- Systems/applications architecture and development.
- Data management.
- Business and artificial intelligence.
- Machine learning.
- Network architecture and security.
Kforce helps tech companies find the right candidate for the jobs of tomorrow.
In 2017, Kforce’s total annual revenue was $1.3 billion. That revenue grew to nearly $1.4 billion amid the COVID-19 pandemic as companies pivoted to work-from-home environments.
Kforce‘s annual revenues are projected to reach $1.7 billion by 2023 — thanks to increased tech job demand.
That’s 31.2% growth in top-line revenue expected over the next three years.
Kforce Stock Powers Up Nearly 100% in the Last 12 Months
A year ago, Kforce’s stock was priced at around $41 per share.
The stock moved higher and tested some support around $57 per share during the summer months.
Since November 1, however, the stock has jumped more than 20% to just below $80. That’s “maximum momentum” we like to see in a stock.
Kforce Inc.’s Stock Rating
Using Adam’s six-factor Green Zone Ratings system, Kforce Inc. scores a 98 overall. That means we are “Strong Bullish” on the stock and expect it to outperform the broader market by three times in the next 12 months.
Kforce Inc.’s Green Zone Rating on November 22, 2021.
Kforce’s stock rates in the green in all six factors we use to rate stocks:
- Quality — Kforce blows the doors off the industry in its returns on assets, equity and investments. It has a return on equity of 40.5% compared to the professional services industry average of just 8.5%. The company earns a 95 on quality.
- Volatility — Kforce’s stock price jump over the last 12 months has met little resistance. Since November 1, the price jumped more than 18% with no resistance. The company scores a 94 on volatility.
- Momentum — In the last 12 months, Kforce’s stock price has jumped from $40 to around $79 per share … including a big jump since November 1 — indicating it is in line for what Adam calls “maximum momentum.” The company scores an 87 on momentum.
- Value — The company’s price-to (earnings and sales) are all below the industry averages — including a price-to-sales multiple of 1.09 compared to the industry average of 3.5. Kforce scores a 67 on value
- Growth — The company has a trailing 12-month sales growth rate of 10.4% and a trailing 12-month earnings per share growth rate of 41.3. Nova earns a 66 on growth.
- Size — Kforce’s market capitalization is right at $1.7 billion — a great size for companies we like the recommend. It scores a 65 on size.
Bottom line: Tech is booming.
And companies within the sector are always looking for quality employees.
Rather than sift through thousands of applications, these companies will turn to agencies to do the heavy lifting of screening applicants.
That’s why Kforce Inc. is a stock worth considering for your portfolio.
Safe trading,
Matt Clark, CMSA®
Research Analyst, Money & Markets
Matt Clark is the research analyst for Money & Markets. He is a certified Capital Markets & Securities Analyst with the Corporate Finance Institute and a contributor to Seeking Alpha. Prior to joining Money & Markets, he was a journalist and editor for 25 years, covering college sports, business and politics.
