Monster Worldwide, Inc. (NYSE:MWW) released its quarterly report and going by the headnotes the company has done well. However as with all reports the real picture is obscured. The company sold its Korean business JobKorea in the past quarter thereby making comparisons to previous quarters misleading due to onetime windfall. The company has also reported a 4% drop in revenue North America due to increased competition; this means that the optimistic prediction made by the company in second quarter was wrong.
The company also used the 3rd quarter to guide down EBITDA margin expectations significantly. The cut in expectations was especially striking when compared to previous statements nad expectations by the company.
On the positive sides there are a few positives that also need to be mentioned. The business in Europe and other non-NA territories showed a surprising improvement. The Indian arm of Monster is doing quite well. The company also announced a stock buyback to the tune of $75 million this is guaranteed to put an upward pressure to the prices so there is a scope for short term profit for traders.
Other positives include the removal of company’s CFO James Langrock who was roundly criticized for his tenure. The company also seems to have pulled off some cost cutting measures and is expected to clock modest revenue growth in the next quarter. There also does not seem to be any risk of a large scale hit to the company that might destroy stock value.
Overall Monter’s story is complex, the company has cash and intends to use it for buyback, that is a good indication that the board considers them undervalued, also there is not a significant risk of a bad fourth quarter therefore stocks of Monster Worldwide, Inc. (NYSE:MWW) are a buy even with a disappointing quarter, moreover the share prices are quite low so that should mitigate some of the risk.