Ahead Of The Bell: Staffing Sector Outlook

HARTFORD, Conn. (AP) — Staffing company stocks could rise twofold or more as business improves in the next two to three years, an analyst said Monday.

However, analyst Ty Govatos of C.L. King & Associates cautioned that his calculations do not include risks that could halt the stocks' climb.

With many business services stocks having more than doubled from their lows, investors are asking whether it is too late to buy shares of staffing companies and, if not, which stocks offer the best upside, he said in a client note.

Govatos calculated each stock's potential based on possible earnings two to three years from now.

"That seems like a long way off but investors will likely be discounting those earnings 18 to 24 months from now," he said. "The end result shows the majority of stocks still have an upside potential ranging between 100 percent and 150 percent."

Companies he believes will turn in the highest earnings and share values will likely be Hudson Highland Group Inc., Heidrick & Struggles International, Administaff Inc., Spherion Corp., Robert Half International Inc. and Korn/Ferry International.