Robert Half International – A High ROIC, Prodigious Free Cash Flow Producer Obscured By EPS Cyclicality

Robert Half International - A High ROIC , Prodigious Free Cash Flow Producer Obscured By EPS Cyclicality by Nat Stewart, Opus Capital Managment

We can’t help but think that “Mr. Market” undervalues Robert Half International, Inc. (RHI) when viewed over time vs. the myopic focus on next few quarters. The knock on the company is that staffing is a highly cyclical and economically sensitive business – RHI tends to trade in line with the other staffing firms.

[We are long in our Small Cap Value Plus and All Cap Value Plus strategies.]

However, the interesting thing is that RHI’s free cash flow is much more stable than its net income – a fact that “Mr. Market” often seems blind to.  In the below...