There's a Hiring Surge at THESE 3 Companies...

Last month, we looked at a few of the market’s top “hiring highlights” … three companies where a surge in new hiring might be pointing the way to future growth.

This month, I’m back with an update on that first crop — along with another batch of three more promising stocks to watch. I’ll share the details on those new companies in today’s video update, along with a quick explanation of why this single factor can be such a strong forward indicator.

Click below to start the video:

Video transcript:

Welcome to Moneyball Economics. I’m your host, Andrew Zatlin.

Last month, we started an experiment. I shared three companies where the hiring was going off the charts, where the hiring growth was going hyperbolic. And the experiment was, would this hiring growth get reflected in stock price growth?

So today I’d like to check in what’s happened to those three companies, and I’d like to share three new ones.

But first, let’s take a step back. I have been asked recently why I focus so much on the labor markets. And the answer’s very straightforward. Today’s hiring is tomorrow’s business activity. So, high level, if I want to know what’s going on in the economy at large, if I want to be able to predict what’s about to happen, if I want to spot inflection points before they happen and position accordingly, then I turn to hiring. It gives me an amazing finger on the pulse of the economy.

And the mechanism for getting there is tracking hiring at the individual company level.

See, there’s a certain behavior that goes along with operating a business. You don’t hire today for business today. You hire today, you manage your workforce according to the business you expect [tomorrow]. And so companies are looking at customer orders that are coming down the pipeline. They’re looking at future business activity, and they’re making sure that they’ve got the workforce today to handle that business activity that’s about to happen. Because if you’ve got orders coming in and you don’t have people able to meet those orders, you lose business.

So aggregate this activity and you have a good finger on the pulse of the economy, but you can also stay at the company level. I’ve got a decade and a half of hiring at specific publicly traded companies. And I have found that oftentimes the best time to enter a company, to invest in a company is when they are starting that hyperbolic growth, because that’s when you get a lot of upside earning surprises.

And that’s also when the markets recalibrate the value of that company.

In essence, by tracking hiring, we should be able to anticipate stock price growth. And that was the experiment last month when I presented Chevron, MassTech, and microchip technology. All three were suddenly showing a lot of growth in their hiring. In other words, all three were starting to say they were entering a period of hyperbolic business growth.

So let’s talk about what happened to their stock prices. Chevron. Well, Chevron went up 15% before coming back down because of the Iran war going on. Right now, there’s a small negative there. I think it’s maybe minus 2% since I shared Chevron with you. But that’s not the same with MasTec. Mastec’s up almost 30%. Microchip is up 38%. So we’ve got two wins and a small loss. This month, I’d like to introduce three new companies.

By the way, before I do that, all three, Chevron, MassTech, and Microchip are still exhibiting the same level of growth. So I believe those are companies where we’ll come back a month from now and we’ll see even more growth.

But for this month, well, I’m tempted to talk semiconductor companies because my gosh, that’s where I’m seeing phenomenal hiring acceleration. However, the stock prices seem to already reflect that. So I’m not sure where the upside is at this juncture. So instead, I’d like to share with you three other companies, starting with Halliburton.

Now, Halliburton’s interesting. They’re in the oil and drilling services arena, and their stock price has come down dramatically while their hiring is going up. If you want to know, am I tracking these companies and drilling into them, really looking at their technicals, their valuations and stuff? I’m not. Remember, this is a one-dimensional conversation we’re having, and that is that Halliburton has stepped hard on the gas pedal when it comes to hiring.

And that makes sense, right? Donald Trump in Venezuela and in Iran, there’s a lot of activity. UAE, a lot of things have been destroyed. A lot of things are opening up. Suffice it to say a lot of capital spending is about to happen and a lot of associated spending’s going to happen to go in and open up oil wells and so forth. So Halliburton seems to be in a sweet spot. The stock price is pulled back.

Let’s talk about a second one, Motorola.

I know nothing about Motorola. I know that they are in the cell phone business and so on and so forth. But I also know that their stock price has gone side to side while they seem to be ramping up their hiring strongly. And a company that’s stodgy like Motorola isn’t going to hire a lot more people unless they’re seeing a lot of growth coming down the pipeline.

Last but not least, Shake Shack.

Shake Shack, you may or may not be familiar with them. They’re a fast casual restaurant. I don’t know what’s going on out there, but I would bet dollars to donuts that consumers are trading down. They’re looking for a better bank for their buck when it comes to getting some food. Fast, casual may be a place to go, but suffice it to say Shake Shack seems to be on an expansion trajectory when it comes to their hiring.

So there we have it.

We’re going to keep watching what’s going on with Chevron, MassTech and Microchip, but at the same time, let’s now add to this grouping Shake Shack, Motorola and Halliburton, because one thing we know for sure, we are in it to win it. Zatlin out.