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4 Top Stocks Poised to Gain From Upbeat Jobs Scenario
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Democratization of COVID-19 vaccines, reduction in new coronavirus cases and optimism surrounding fresh round of large fiscal stimulus are igniting hopes of economic recovery.
In fact, the latest February data from the Department of Labor reported better-than-expected nonfarm payroll additions. This data is indicative of brighter prospects for the labor market in the days to come.
Notably, in February, nonfarm payroll additions jumped to 379,000 following an upward revision of 166,000 in January.
The figure outpaced the market expectations of a rise of 182,000 thanks to easing business restrictions amid reopening of economies, falling coronavirus infection rates, accelerated vaccine distribution from multiple makers and hopes of hefty fiscal stimulus under the Biden administration.
Markedly, January's job additions were revised upward from 49,000 to 166,000. This shows that in the first two months of 2021, the U.S. economy added 545,000 jobs.
Also, the unemployment rate in February fell to 6.2% from 6.3% in January. The consensus estimate was 6.4%. This was a significant reduction from the pandemic-era high of 14.8% recorded in April 2020.
Further, average hours of work per week was 34.6 in February compared with 34.9 in January.
The U.S. unemployment rate declined to 6.2% in February 2021 — the lowest rate since April's record high of 14.8% and below market expectations of 6.3%. Still, the jobless rate remained well above the pre-pandemic levels.
The number of unemployed people declined by 158 thousand to 9.97 million, sliding below the 10 million mark for the first time since March 2020.
4 Best Bets in Current Scenario
The improvement in employment levels signal good days ahead for software companies engaged in providing talent acquisition and management offerings.
Moreover, consumer confidence in the United States improved again in February. On Feb 23, the Conference Board reported that Consumer Confidence Index rose to a three-month high of 91.3 in February from a revised 88.9 in January. The consensus estimate was 88.8.
The aforementioned statistics coupled with strength in retail sales and resilience in housing sector, and recovering coronavirus-battered sectors including industrial, auto, and hospitality verticals indicate brighter time ahead.
Let us discuss four top-ranked stocks well-poised to capitalize on increasing spend on talent acquisition brought about by improvement in job market scenario courtesy of supporting economic indicators.
One Year Price Performance
Cornerstone OnDemand, Inc. : The Santa Monica, CA-based company offers learning and people development solutions in the form of SaaS. The company is benefiting from the acquisition of Saba Software, which has expanded its reach to more than 6,000 customers of all sizes across 180 countries and nearly 50 languages.
The company’s enterprise people development solutions include learning solutions, which provide learning management software and employee-driven development training to bridge skills gaps.
Strength in its recruiting solutions, which help organizations to attract, hire, and onboard the right employees, and HR solutions that provide an aggregated view of employee data with workforce planning, self-service management, and compliance reporting capabilities, make the stock alluring in the present scenario.
Moreover, growing subscription revenues driven by new business wins and customers is a key catalyst.
The Zacks Consensus Estimate for this Zacks Rank #1 (Strong Buy) company’s 2021 earnings has moved up 35.3% to $2.07 per share over the past 30 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Upwork Inc. (UPWK - Free Report) : This Santa Clara, CA-based online talent marketplace provider has been striving hard to attract large business organizations to hire freelance talent through its Work Together Talent Grants program. A surge in hiring of freelance talent as businesses resort to stringent cost-saving practices are expected to result in healthy adoption of Upwork’s services.
Moreover, the company collaborated with Zoom VideoZM to integrate the latter’s video and voice communication tools with its platform. This will enable it to provide clients with seamless and secure communication experience for candidate interview and project co-operation.
The company has also extended Direct Contracts offering to freelancers. The offering will aid freelancers to invoice and bill their clients for hourly work and utilize Escrow protections for fixed-price jobs.
These initiatives are expected to help it in boosting new core clients and strengthening its business prospects. Currently, the company carries a Zacks Rank of 2 (Buy).
The Zacks Consensus Estimate for its 2021 bottom line has narrowed from a loss of 24 cents to 14 cents per share over the past 30 days.
Workday Inc. (WDAY - Free Report) : Pleasanton, CA-based provider of enterprise-level software solutions for financial management and human resource domains is well positioned to gain from the growing pipeline of the latest offerings, including Health, Accounting Center, and Extend.
The company’s cloud-based platform combines finance and HR in a single system that makes it easier for organizations to provide analytical insights and decision support.
Further, the company is gaining from solid uptick in its two new offerings, VIBE Central and VIBE Index, that aid HR leaders boost inclusivity, and accelerate belonging and diversity (B&D) initiatives within the workplace. Workday noted that VIBE is the acronym for Value Inclusion, Belonging, and Equity.
Additionally, the availability of Workday Accounting Center and Workday Talent Marketplace is bolstering adoption. Also, Workday People Analytics — an augmented analytics application that delivers deep insights regarding risks and opportunities related to a company’s workforce — is gaining traction, which bodes well for this Zacks Rank #2 company.
The Zacks Consensus Estimate for its fiscal 2022 earnings has moved up by 1 cent to $2.91 per share over the past 60 days.
Microsoft Corporation (MSFT - Free Report) : Redmond, WA-based tech giant is striving to enhance its employee experience offerings. Solid uptick in Teams video conferencing offering amid work-from-home wave is a tailwind.
Further, improving macroeconomic scenario with good indicators for job market and rise in spend on advertising as economies reopen are likely to boost LinkedIn and Search revenues. This, in turn, favors growth prospects for this Zacks Rank #2 company.
Notably, Microsoft is seeing record levels of engagement across LinkedIn platform, as nearly 740 million members (in the last reported quarter) utilize the network to connect, learn, and find new opportunities. Sessions increased 30% and Conversations were up 48%. Moreover, hours spent on LinkedIn Learning were up 2X, compared to the year-ago equivalent.
LinkedIn’s advertising business accounted for more than a third of LinkedIn’s total revenues. LinkedIn Marketing Solutions was up over 50%, as advertisers increasingly turn to the platform as the trusted way to reach professionals ready to do business.
Moreover, the company is gaining from the secular shift to remote selling. Growing clout of Dynamics 365 and LinkedIn Sales Navigator is expected to boost incremental revenues.
The Zacks Consensus Estimate for its fiscal 2021 earnings has moved up 9.1% to $7.34 per share over the past 60 days.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
Image: Bigstock
4 Top Stocks Poised to Gain From Upbeat Jobs Scenario
Democratization of COVID-19 vaccines, reduction in new coronavirus cases and optimism surrounding fresh round of large fiscal stimulus are igniting hopes of economic recovery.
In fact, the latest February data from the Department of Labor reported better-than-expected nonfarm payroll additions. This data is indicative of brighter prospects for the labor market in the days to come.
Notably, in February, nonfarm payroll additions jumped to 379,000 following an upward revision of 166,000 in January.
The figure outpaced the market expectations of a rise of 182,000 thanks to easing business restrictions amid reopening of economies, falling coronavirus infection rates, accelerated vaccine distribution from multiple makers and hopes of hefty fiscal stimulus under the Biden administration.
Markedly, January's job additions were revised upward from 49,000 to 166,000. This shows that in the first two months of 2021, the U.S. economy added 545,000 jobs.
Also, the unemployment rate in February fell to 6.2% from 6.3% in January. The consensus estimate was 6.4%. This was a significant reduction from the pandemic-era high of 14.8% recorded in April 2020.
Further, average hours of work per week was 34.6 in February compared with 34.9 in January.
The U.S. unemployment rate declined to 6.2% in February 2021 — the lowest rate since April's record high of 14.8% and below market expectations of 6.3%. Still, the jobless rate remained well above the pre-pandemic levels.
The number of unemployed people declined by 158 thousand to 9.97 million, sliding below the 10 million mark for the first time since March 2020.
4 Best Bets in Current Scenario
The improvement in employment levels signal good days ahead for software companies engaged in providing talent acquisition and management offerings.
Moreover, consumer confidence in the United States improved again in February. On Feb 23, the Conference Board reported that Consumer Confidence Index rose to a three-month high of 91.3 in February from a revised 88.9 in January. The consensus estimate was 88.8.
The aforementioned statistics coupled with strength in retail sales and resilience in housing sector, and recovering coronavirus-battered sectors including industrial, auto, and hospitality verticals indicate brighter time ahead.
Let us discuss four top-ranked stocks well-poised to capitalize on increasing spend on talent acquisition brought about by improvement in job market scenario courtesy of supporting economic indicators.
One Year Price Performance
Cornerstone OnDemand, Inc. : The Santa Monica, CA-based company offers learning and people development solutions in the form of SaaS. The company is benefiting from the acquisition of Saba Software, which has expanded its reach to more than 6,000 customers of all sizes across 180 countries and nearly 50 languages.
The company’s enterprise people development solutions include learning solutions, which provide learning management software and employee-driven development training to bridge skills gaps.
Strength in its recruiting solutions, which help organizations to attract, hire, and onboard the right employees, and HR solutions that provide an aggregated view of employee data with workforce planning, self-service management, and compliance reporting capabilities, make the stock alluring in the present scenario.
Moreover, growing subscription revenues driven by new business wins and customers is a key catalyst.
The Zacks Consensus Estimate for this Zacks Rank #1 (Strong Buy) company’s 2021 earnings has moved up 35.3% to $2.07 per share over the past 30 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Upwork Inc. (UPWK - Free Report) : This Santa Clara, CA-based online talent marketplace provider has been striving hard to attract large business organizations to hire freelance talent through its Work Together Talent Grants program. A surge in hiring of freelance talent as businesses resort to stringent cost-saving practices are expected to result in healthy adoption of Upwork’s services.
Moreover, the company collaborated with Zoom Video ZM to integrate the latter’s video and voice communication tools with its platform. This will enable it to provide clients with seamless and secure communication experience for candidate interview and project co-operation.
The company has also extended Direct Contracts offering to freelancers. The offering will aid freelancers to invoice and bill their clients for hourly work and utilize Escrow protections for fixed-price jobs.
These initiatives are expected to help it in boosting new core clients and strengthening its business prospects. Currently, the company carries a Zacks Rank of 2 (Buy).
The Zacks Consensus Estimate for its 2021 bottom line has narrowed from a loss of 24 cents to 14 cents per share over the past 30 days.
Workday Inc. (WDAY - Free Report) : Pleasanton, CA-based provider of enterprise-level software solutions for financial management and human resource domains is well positioned to gain from the growing pipeline of the latest offerings, including Health, Accounting Center, and Extend.
The company’s cloud-based platform combines finance and HR in a single system that makes it easier for organizations to provide analytical insights and decision support.
Further, the company is gaining from solid uptick in its two new offerings, VIBE Central and VIBE Index, that aid HR leaders boost inclusivity, and accelerate belonging and diversity (B&D) initiatives within the workplace. Workday noted that VIBE is the acronym for Value Inclusion, Belonging, and Equity.
Additionally, the availability of Workday Accounting Center and Workday Talent Marketplace is bolstering adoption. Also, Workday People Analytics — an augmented analytics application that delivers deep insights regarding risks and opportunities related to a company’s workforce — is gaining traction, which bodes well for this Zacks Rank #2 company.
The Zacks Consensus Estimate for its fiscal 2022 earnings has moved up by 1 cent to $2.91 per share over the past 60 days.
Microsoft Corporation (MSFT - Free Report) : Redmond, WA-based tech giant is striving to enhance its employee experience offerings. Solid uptick in Teams video conferencing offering amid work-from-home wave is a tailwind.
Further, improving macroeconomic scenario with good indicators for job market and rise in spend on advertising as economies reopen are likely to boost LinkedIn and Search revenues. This, in turn, favors growth prospects for this Zacks Rank #2 company.
Notably, Microsoft is seeing record levels of engagement across LinkedIn platform, as nearly 740 million members (in the last reported quarter) utilize the network to connect, learn, and find new opportunities. Sessions increased 30% and Conversations were up 48%. Moreover, hours spent on LinkedIn Learning were up 2X, compared to the year-ago equivalent.
LinkedIn’s advertising business accounted for more than a third of LinkedIn’s total revenues. LinkedIn Marketing Solutions was up over 50%, as advertisers increasingly turn to the platform as the trusted way to reach professionals ready to do business.
Moreover, the company is gaining from the secular shift to remote selling. Growing clout of Dynamics 365 and LinkedIn Sales Navigator is expected to boost incremental revenues.
The Zacks Consensus Estimate for its fiscal 2021 earnings has moved up 9.1% to $7.34 per share over the past 60 days.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
See the 5 high-tech stocks now>>