5 Hiring Companies That Could Get Holiday Lift
NEW YORK (
) -- Holiday hiring is expected to increase 54% over 2008 levels, but the hiring isn't strong across the board. Only certain companies feel confident enough to hire in big numbers, and most of those are in the seasonal retail and shipping industries.
In retail and shipping, employees get added the payroll in order to handle the additional seasonal customers, which turns out to be a positive sign for retail stocks.
Another bonus is the added purchases power from those temporary workers. "Employees can be turned into consumers once their shifts are over. Last year, these people weren't in the store. Two, most view holiday jobs as extra paychecks to be spent on holiday purposes, which again is pro retail," retail analyst Brian Sozzi says.
Additionally, a recent survey by CareerBuilder.com says that employers hiring seasonal workers in the fourth quarter of this year are 40% are likely to keep them on as a full-time, permanent employee.
It's no surprise that the top seasonal workers are in the retail space, but shippers also join the holiday rush. Here are the top five companies for holiday hiring.
5. Best Buy
Best Buy
(BBY) - Get Report
is adding 29,000 workers for the holiday season. Even though Argus Research analyst Christopher Graja rates the company a "hold" he gives the company a 12% growth rate.
Graja wrote recently, "The double-digit growth rate reflects our belief that the company will continue to open new stores and make them productive. We expect the emphasis to be on smaller format concepts. We also expect smartphones and portable devices like the iPad to gain even greater adoption."
Best Buy has already said that iPad and Galaxy tablets are hot for holiday gift items. In addition, Microsoft just launched its new Xbox Kinect game console. Microsoft expects to sell 5 million units during the holiday season and surely Best Buy will sell some of those units.
4. Kohl's
Kohl's
(KSS) - Get Report
low-priced department store is hiring 40,000 employees for the holidays, a 20% increase over 2009. Argus analyst Christopher Graja rates the stock a "buy" and adds, "Kohl's seems to be making the right merchandising decisions in adding products from the likes of the Food Network, skateboarder Tony Hawk, designer Vera Wang, and TV starlet Lauren Conrad."
Over 30% of Kohl's sales come in the holiday season. Graja says the shares are trading at 7.2x trailing EBIT and gives it a $65.00 price target. The company also has $2.5 billion in cash and $298 million in long-term investments.
3. Limited Brands
Limited Brands
(LTD)
, home of Victoria's Secret and Bath & Body Works is bringing on an additional 50,000 workers for the season. Argus analyst Erin Ashley Smith rates the stock a buy and gives it a $32.00 price target. "We believe that the company is well positioned to drive increased sales and margins at both Victoria's Secret and Bath & Body Works," she writes.
October same store sales were up 9% and the company lifted its third-quarter estimates from $0.15 to $0.17. The fashion looks for The Limited were well-received by fashion blogs and Victoria's Secret has a limited edition makeup line just for the holiday.
2. UPS
The
United Parcel Service
(UPS) - Get Report
is hiring 50,000 temporary employees. A whopping number compared to
FedEx
(FDX) - Get Report
, who was vague about its hiring plans; either saying it was flat from the previous year or only hiring where necessary.
Bill Selesky of Argus Research has a $79.00 price target for UPS and a buy rating. He writes, "We note that UPS is emerging from the recession as a leaner, more focused, and better positioned company, and we expect it to take full advantage of improving economic trends, particularly in international markets." Approximately 49% of holiday shoppers are expected to make their purchases online and those gifts will need to be shipped. UPS is preparing for that onslaught.
1. Macy's
The miracle on 34thstreet is loading up on 65,000 holiday helpers. Chris Graja only has a hold rating on the stock, but seems modestly positive about
Macy's
(M) - Get Report
by writing, "We think that management deserves credit for responding to the recession by preserving cash and reducing debt. The company is also having success with its 'My Macy's' strategy, which aims to tailor service and merchandise to the needs and preferences of local markets." Same store sales were up 2.5% in October saying it was a "strong trend heading into holiday."
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