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ASGN: Staffing Service Targets Specialists and Scientists

Date: Saturday, November 3, 2018 11:48 PM EDT

ASGN Inc. (ASGN) is a provider of in-demand, highly skilled professionals in the technology, digital, creative, healthcare technology, and life sciences sectors.

Based in Calabasas, California and formerly known as On Assignment, the company uses its “contingent labor pool delivery model” to serve an addressable $280 billion market for talented workers in the U.S.

The company now operates in three major segments. Apex offers mission critical IT, scientific, and creative/digital professionals. Its businesses in this segment are among the top three staffing firms in the U.S. in their areas of expertise.

Oxford provides high-end IT, programming, and engineering professionals, permanent placement services, and clinical and scientific workers in the U.S. and Europe. These areas are among the most attractive end markets for the staffing industry. Finally, recently acquired ECS provides government IT services by contract to military and federal agencies.

Since 2008, ASGN has grown revenues at an average rate of 25.0%. EPS grew at 55.2% a year on average during this period. Revenues and earnings slowed in 2009 and 2010 as the recession reduced corporate employment needs. Free cash flow has supported earnings per share growth.

The company sees several catalysts for growth: increasing market share, growth of value-added services, expanded government IT services, and strategic acquisitions.

The stock was first recommended in August 2017 at a price of around $48. Since then, the stock has grown more than 38% to a recent price of $66. We think there is still plenty of growth potential in the company’s line of business.

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