It’s All About Who You Know

With more than two million Americans looking for work, job-services companies aren’t going out of style any time soon.

There are two factors at play here.

First, high levels of unemployment mean a growing number of job seekers are signing up for these services. That gives job-services sites bargaining power with advertisers who pay to grab clicks from the swelling pool of hopeful workers.

It also makes it much more difficult for hiring managers to find the right candidate for the few positions they’re looking to fill.

Hiring used to be a manageable process for internal human resources teams. But now they’re swamped by applications, many of which are completely unqualified for the position in question, so it’s nearly impossible to do the work alone. That’s why they turn to job-services companies for help.

So how are these companies performing in this difficult job market?

Well, that depends on who we’re talking about.

Monster.com (MWW, the white line in the chart below) has nearly gone extinct, while LinkedIn (LNKD, the green line) is soaring.

See larger image

You could almost say – based on the chart pattern above – that Monster.com has passed the baton to LinkedIn as the go-to place to find job prospects.

Like many stocks, Monster.com peaked in 2007 and tumbled 90% into early 2009. Yet, unlike most stocks, Monster.com never recovered. It’s trading for less today than it did in 2009.

When LinkedIn came onto the stage with its initial public offering in 2011, it seemed to take on the rebound gains that might have gone to Monster.com. The former is now trading more than 31-times higher than it did at the start of 2012, when you could have picked up shares for less than $8 a piece.

Despite being the established player and having better fundamentals, Monster.com appears to be seriously out-of-favor among job seekers and investors alike.

LinkedIn’s social networking model may be proving what most of us know already: It’s all about who you know!

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Categories: Markets

About Author

Adam O'Dell has one purpose in mind: to find and bring to subscribers investment opportunities that return the maximum profit with the minimum risk. Adam has worked as a Prop Trader for a spot Forex firm. While there, he learned the fundamentals of trading in the world’s largest market. He excelled at trading the volatile currency markets by seeking out low-risk entry points for trades with high profit potential. An MBA graduate and Affiliate Member of the Market Technicians Association, Adam is a lifelong student of the markets. He is editor of our hugely successful trading service, Cycle 9 Alert.