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Stock Strategist Industry Reports

Playing the Employment Rebound

We see positive private sector growth in the new year--and one opportunity in particular.

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The employment market has been in a weakened state not seen since the early 1980s. Nonfarm job growth has been lackluster, and the unemployment rate remains close to 10%. However, several positive factors have filtered through the system over the last quarter, and we're confident private sector growth will be on the positive side from this point forward.

Along with improving government employment reports, many employment services firms have reported solid results over the last quarter. The outlooks given by many management teams were also highly encouraging as the probability of a double-dip scenario slowly fades. We believe moderate near-term growth coupled with a long-term secular trend toward greater employment services usage by businesses will be highly beneficial to most of the employment services firms we currently cover. Additionally, we believe investors are presented with an advantageous opportunity in narrow-moat health-care staffer  AMN Healthcare (AHS).

Vishnu Lekraj does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.