51job, Inc. - Momentum - TraderPlanet

51job, Inc. (JOBS) recently spiked back to its 52-week high on the heels of strong Q4 results from late February that included a 17% earnings surprise. With the next-year estimate now projecting 30% growth, this Zacks #1 rank stock is working overtime for momentum.

Company Description

51job, Inc. provides integrated human resource services to employers and job seekers primarily in China. The company was founded in 1998 and has a market cap of $1.76 billion.

The strong Chinese economy is lifting many boats, including employment services companies that help their customers identify labor resources. That dynamic lifted 51job to strong Q4 results on February 28 that came in ahead of expectations.

Fourth-Quarter Results

Revenue for the period was up 34% from last year to $46 million. Earnings also came in strong at 35 cents, 17% ahead of the Zacks Consensus Estimate, where the company has an average earning surprise of 16% over the last four quarters.

The company’s online division led the way, with online recruitment services revenue up 60% from last year to $24 million. Margins were also on the upswing, with gross margin expanding to 66.5% from 60.5% last year. 51job President Rick Yan noted that 2010 represented record sales, earnings and margins for the company, sounding an optimistic tone for 2011.

Financial Profile

51job also continues to strengthen its balance sheet, with cash and equivalents up $48 million from last year to $188 million and no long-term debt on the balance sheet.

Estimates

Analysts liked the good quarter and sent estimates higher, with the current year adding 16 cents to $1.80 and the next-year estimate gaining 23 cents to $2.32, a bullish 29% growth projection.

Valuation

In light of the recent gains, the valuation looks a bit hot, with a forward P/E of 34X against its peer average of 23X.

12-Month Chart

On the chart, JOBS has rallied nicely over the last few days to move back to its 52-week high at $64.55. Look for support from the long-term trend and short-term low on any weakness, take a look below.