Secondary Recommendation

Empresaria - Recruitment group trading on unjustified discount to rivals

October 2015

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

Shares in the larger quoted recruitment firms have sky-rocketed over the past couple of years with Hays, Robert Walters and Michael Page now commanding prospective PEs of 17.7, 22.7 and 24.0, respectively. However, one that has lagged the sector re-rating has been Crawley-based Empresaria, an AIM-listed staffing group with operations in over 19 countries around the world. Even though it posted interims that were well ahead of market expectations, the shares still only trade on a prospective PE of 8.8 for this year and 8.0 for next and there are strong grounds for expecting this gap to narrow.Empresaria was founded in 1996 under the “MITIE” model where key entrepreneurial people are attracted by the opportunity to own a ...

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With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

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