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Markets are called higher this morning. This is what's happening today:
Spain asked euro-region governments for as much as E100b to rescue its banking system. Following are the main details of the agreement, reached on June 9.
Stock to watch: Manpower (Price $35.71, Price Target $48)
We like ManpowerGroup due to its strong brand, geographic diversity, and margin upside. ManpowerGroup's global exposure should also mean higher structual growth than US-focused peers. We also believe this cycle will be better than last cycle because of 1) corporate desire for flexibility post the near depression experience of '08-'09, 2) US wages at all-time lows as a percentage of GDP ("cut too deep"), 3) less headwind from IT offshoring and outsourcing than last cycle so better overall growth prospects, and 4) further desire for flexibility due to less business-friendly US government. All of these structural factors should drive the temp penetration rate to new highs, and with it ManpowerGroup's share price. Finally, we think ManpowerGroup has the best peak-to-peak margin growth opportunity due to its higher exposure to 1) permanment placement fees, 2) professional staffing, and 3) higher-margin countries like Germany, Sweden and Italy. We rate MAN as Buy due to its attractive forward valuation, higher-than-expected incremental margins, and still-depressed margin and EPS levels overall. As investors get more confident on Europe, MAN should benefit. Buy.
For further information on Manpower or other stocks and bonds we follow, contact our offices on 25688688.
Good day and happy trading!
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