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The Panic-Proof Portfolio (Stockchase Research)Korn/Ferry InternationalKFYTOP PICKJan 06, 2022

Stockchase Research Editor: Michael O'Reilly We again reiterate KFY, the world's largest executive search firm (with experts in over 50 countries) as a TOP PICK. It recently reported record quarterly income that was up over 170% over the year along with record earnings. The company has adopted online AI technology to better help companies develop HR strategies. The EPS growth creates a PEG ratio of 1.03. It pays a small dividend, backed by a payout ratio under 10% of cash flow. We like that it continues to build cash reserves, while paying down debt and buying back stock. We recommend trailing up the stop (from $55) to $65, looking to achieve $102 -- upside potential over 30%. Yield 0.62% (Analysts’ price target is $102.25)

The Panic-Proof Portfolio (Stockchase Research)

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Stock price when the opinion was issued

$73.26

As of Jun 11, 2026. Market Open.

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WATCH

They report Wednesday. This executive recruiter has been delivering good numbers, but nobody cares. However, pay attention to see if executive jobs are also turning over. The Fed won't stop tightening until we see weakness across the board, including in the C suite. If not, then Jerome Powell has a long way to go.

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Curated by Michael O'Reilly since 2020.
1550+ opinions with 4.81 rating (one of the best performing expert).

PAST TOP PICK

(A Top Pick Jan 06/22, Down 15.6%)Stockchase Research Editor: Michael O'Reilly Our PAST TOP PICK with KFY has triggered its stop at $65. To remain disciplined, we recommend covering the position at this time. This results in a net investment loss of 12%, when combined with the previous buy recommendation.

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Curated by Michael O'Reilly since 2020.
1550+ opinions with 4.81 rating (one of the best performing expert).

TOP PICK

Stockchase Research Editor: Michael O'Reilly We reiterate our recommendation of KFY as a TOP PICK. The executive search firm trades at 18x earnings, compared to peers at 25x. Currently it is valued at under 3x book value. It pays a small dividend, backed by a payout ratio under 20% of cash flow. It continue to build cash reserves, while paying down debt and buying back stock. We would buy this with a stop loss at $55, looking to achieve $89 -- upside potential over 20%. Yield 0.66% (Analysts’ price target is $88.75)

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Curated by Michael O'Reilly since 2020.
1550+ opinions with 4.81 rating (one of the best performing expert).

TOP PICK

Stockchase Research Editor: Michael O'Reilly This employment recruitment company is well positioned for the return to work of higher ended laborers. Recently reported earnings posted an all time high in revenue, that was up over 25% on the year. EPS of $1.21 beat expectations of $0.36. They approved a 20% increase in the dividend, which is backed by a payout ratio under 20% of cash flow. We would buy this with a stop loss at $52, looking to achieve $84 -- upside over 15%. Yield 0.66% (Analysts’ price target is $84.00)

DON'T BUY

Why is the dividend flat? Because they paid a lot for a consulting group. He sold his shares a year or so ago. It's an economically sensitive stock; executive placements dry up in downturns.

WAIT

They made a huge acquisition of Hull Consulting. Earnings come out on Thursday. It is economically sensitive--that's a caveat. He expects pretty good earnings, but wait until earnings are released to be safe.

BUY

They consult in high-end executives. KFY is ecomomically sensitive (who would hire a COO in a recession?). But he doesn't see a recession coming. KFY is now a buying opportunity.

PAST TOP PICK

(A Top Pick Jan 09/18, Down 1%) Known as an executive search firm, but now most of the revenues come from consulting. Earnings were up 20% this year. Market cared about fear, not earnings. Expect 10% or more in earnings growth this year. Still positive on US growth, and Korn/Ferry will benefit.

BUY

What happens when times go bad, when companies do less hiring? Maybe they do less executives hiring. Maybe KFY's acquisition of Hay Group reduces their cyclicality and makes them resist the next recession better. It's a v very good company in a space with few investable companies.

TOP PICK

This is executive recruiting for higher paying jobs. The thesis is that as the economy improves, people will be looking for better paying jobs. The knock on the company is that they made an acquisition a couple of years ago of a company that was more in the consulting business, and the margins were not there until the last couple of quarters. In the last quarter, there was 10% organic sales growth. Valuation is extremely cheap. This is going to benefit from tax reform and an improving US economy. Dividend yield of 1%. (Analysts' price target is $49.)

COMMENT

One of the premier international headhunting firms. Firms like LinkedIn and other websites have cannibalized the hiring market, but mostly on the lower end. For people like COO’s, CEO’s, CFO’s etc., that is where companies like this make their money.

COMMENT

In 2016, the stock dropped to $19. He thought the market had mispriced the stock. At the time, they had a huge amount of cash on the balance sheet. They used it to acquire Hay Group and diversify their business into pension benefits. Still thinks this has a lot of wind in its sales. Valuation is still quite cheap. He is very excited about this company and its future.

PAST TOP PICK

(A Top Pick March 28/16. Up 13%.) This is into executive recruiting and they made an acquisition to try and diversify to doing pension and salary consulting. Very cheap valuation, and he would add to holdings here.

TOP PICK

This is in executive recruiting in the US for $150,000 type jobs and higher. They get a 30% cut. This is the market leader with great relationships and a network of customers. Just made a very smart acquisition of Hay Group, which is mostly in H&R that has a lot more annuity style revenue, selling information to improve company’s operations. Extremely cheap valuation. Insiders own a lot of stock. Trading at 10X earnings. Dividend yield of 1.43%.

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