Northern Recruitment is out-performing the rest of the sector yet it languishes on a PE way below most in the sector. Is it because the name isn't fancy? Have they just been overlooked? They are on the full market and can be ISA'd. This week Brewin Dolphin have upped estimates for the next two years by over 20% pa and rated them a Buy.

Here's some comparisons:


Michael Page (MPI) - 174p offer
H1 = sales 87m - eps 2p, H2 = sales 91m - eps 1.8p.
Full year 3.8p eps – down 2p from 5.8p in 2002

Last 3 years eps = 9.2p, 5.9p, 3.8p

Forecast eps 5.2p, forecast PE 33.5



Robert Walters (RWA) – 145p offer
H1 = sales 25.3m – eps 1.2p, up 0.3p from 2002

Last 3 year eps = 11.5p, 6.9p, 2.0p

Forecast eps 2.5p, forecast PE 65



Harvey Nash (HVN) – 100p offer
H1 = sales 64.3m – eps 0.15p

Last 3 years eps = 26.4p, 2.8p, 7.1p (FRS3 24p, -38p, -15p)

Forecast eps 1.74p (company says results will be well ahead), forecast PE 57



NORTHERN RECRUITMENT (NRG) - 162p offer
H1 = sales 11m – eps 4.1p

Last 5 years eps = 5.0p, 3.4p, 5.8p

Forecast eps 8.78p (4.1p already under the belt in H1), forecast PE 18.5

The earnings upgrade for 2005 is more than 2p to 11.15p so come NRG's results in Sep the forward PE will be just 14.5 at this price. I'd expect NRG to beat estimates too.

But just based on this years earnings NRG's PE is 18.5 compared to Pe's in the 50-60s, MPI being on 35.

Northern Recruitments earnings growth is 88% for H1 and set to be the same or there abouts for the full year.

All of this growth, nearly 100% and on a PE in the low teens compared to it's peers racey ratings. Northern Recruitment also fared far better through the downturn than any of its rivals and has a very consistent earnings record for a company in a sector which saw a severe downturn.

This stock must get re-rated imo - Brewin's note seems to have stimulated some buyers the last two days too.

CR

A nice buying opportunity - Hays results might be dragging others down but with NRG's forecast PE so low and recent broker upgrades they must be the cheapest in the sector imo.

CR