Forbes released its Company of the Year last week: Monsanto (NYSE:MON).
Forbes also released a short-list of runner-ups. This week's Advertiser Watch feature focuses on these companies.
Besides solid financial performances, these companies have one thing in common: they had stable Hiring Demand through the recession, and their hiring has picked up substantially since March as well. Even though most companies did slow their hiring once the financial crisis hit, these companies maintained adequate levels of hiring compared to what was seen before the recession.
Let's start with the winner: Monsanto (NYSE:MON).
Forbes clearly knows that its choice is controversial : "[Monsanto] has been the object of vicious criticism. In the first round of attacks the company was portrayed as the Satan of agriculture for daring to modify the genes in corn and soybeans. That people have been selecting plant genes for 5,000 years was no defense; Monsanto's gene-splicing threatened the world with ecological catastrophe." Forbes even titled either article "The Planet Versus Monsanto".
Capitalism, however, is not an exercise in popularity. The elements that made Monsanto a winner were its market dominance and financial performance:
- [A] the vast numbers of farmers who prefer its seeds to competing products.
- The company has a $44 billion market value.
- IMonsanto sold $7.3 billion of seeds and seed genes, versus $4 billion for second-place DuPont.
- Monsanto netted $2.1 billion on revenue of $11.7 billion for fiscal 2009.
- Its sales have increased at an annualized rate of 18% over the last five years.
- Its annualized return on capital has been 12%.
Forbes did note, however, good news can sometimes be bad news: "The company has something too close to a monopoly in some seed markets" with the effect that the "Justice Department is looking broadly at competition in agriculture–and is asking questions about Monsanto's practices in particular."
Now to its hiring behavior. The spikes in Hiring Demand at Monsanto are caused by new jobs on AgCareers, an agriculture-specific job board. Monsanto was hiring at least 25 Agricultural Technicians a month during the recession, which compares favorably well to the 2006/2007 period. We do see a drop in Oct 2008, but Hiring Demand now is about the same as before the recession, and in fact spiked in Q4. This is a good sign for Monsanto shareholders.
According to Forbes, "Over the past five years, Coach has posted average earnings-per-share growth of 28% and, according to Thomson Reuters I/B/E/S forecasts, will maintain 15% profit growth over the next few years. Coach delivered an 85% return to shareholders over the 12 months, including dividends". So financial considerations do lead the way here.
However, Forbes also stated that "Handbag and accessories retailer Coach has weathered the downturn by expanding its offerings of lower-price luxury goods." Such a strategy seems to be driven by the fact that over the past 4 years, Coach (NYSE:COH) has hired more Market Research Analysts than any other occupation, including Retail Buyers/Purchasers. That heavy market research focused strategy seems to have paid off.
Salesforce.com (NYSE:CRM) made the short-list because "Salesforce.com's revenue is up 24% over the past year to $1.24 billion. Operating income rose even faster, from $58.5 million to $105.8 million."
What's interesting to see is that Hiring Demand at SalesForce.com has remained fairly stable as well, despite the slight recessionary dip. It never really stopped hiring Computer Specialists or Advertising Managers, a sign that it thought its business was on the right track.
Its stock price has tripled in the past year.
Forbes included DirecTV (NASDAQ:DTV) on its short list because "Despite the tough economy, satellite television outfit DirecTV increased its subscriber base 6% to 18.4 million through the first nine months of 2009. Revenue was up 8% to an estimated $15.6 billion"
The October 2008 spike in DirecTV Hiring Demand was caused by a recruitment binge for "Telecommunications Equipment Installers" on Monster.com, which coincided with a year-long rally in its stock price. In other words, DTV got ready for a surge in subscribers, and its revenues/stock price followed that anticipated increase in demand for its products.
Hormel foods (NYSE:HRL), the makers of SPAM, made the short list because "net income in 2009 rose 20% to $343 million, despite a 3% drop in revenue to $6.5 billion."
An interesting component of Hiring Demand here is that this company does not seem to advertise for jobs much online. Hiring Demand did drop slightly at the end of 2008, but has been rebounding back up since the summertime.
Another interesting pick was Netflix (NASDAQ:NFLX). According to Forbes, "For the first nine months of 2009 revenue was up 22% to $1.2 billion and net income was up 41% to $85 million" there.
It's Hiring Demand has been pretty much stable. There did seem to be a decline in early 2009, but that's only because of a run-up in hiring. Netflix was hiring just as much during the recession as before. It mostly hires for First-Line Supervisors of Production Occupations (i.e. warehouse/shipping managers) and Computer Software Engineers. Tracking the hiring of both those occupations is a good gauge of Netflix business performance.
T.Rowe Price (NASDAQ:TROW) "provides domestic and international equity funds as well as taxable, tax-free, and international bond funds" according to its website. Its stock price took a major hit, as did Hiring Demand, but Forbes likes this company because "a catalog of inexpensive mutual funds helped [it] rope in clients and keep them happy in 2009. Assets under management (nearly $370 billion) popped 33% in 2009, besting the recovery pace of larger (and more expensive) competitors".
Hiring at T. Rowe Price has been inching up slowly, but its stock price has more than doubled.
Finally, we look at Texas Instruments (NYSE:TXN). Texas Instruments "is fast grabbing market share in the $30 billion analog chip business, translating real-world signals into ones and zeros digital computers can understand. Analysts expect TI revenue will fall 17% to $10.4 billion in 2009, from $12.5 billion in 2008, rebounding to just $11.6 billion by the end of 2010. But gross margins should climb to 52% in 2010 from 48% in 2008."
Its Hiring Demand has tracked its stock price performance quite closely. Notice how hiring for Electrical Engineers and Computer Software Engineers nice and steady during the first part of 2009.