re: OLS. Now there's a stock that will build character if you own it. My problem is I'm a character enough already -g-. I've added to my position in OLS at these low 11 levels earlier this month, and I've been in OLS since about 12/96. Aside: note that bv in Yahoo is incorrect IMO. Correct value is 10.4, so price today is not below book.
I originally thought the problems that OLS faces would eventually be overcome. These include: an on-going investigation of corruption in gov't billing alleged of Columbia and OLS (I will just trust that OLS is not going to be severely financially affected by any outcome -- I hope (of course) they are totally innocent and exonerated); and home health care itself which is government dependent and unprofitable. Since home health care seems to be a reasonable alternative to nursing homes or other "assisted living communities", I believe the government will act to restore some of the incentives they (the gov't) removed after bad business practices by small (maybe big too?) operators.
Thirdly, the temp. business seems to be hurting the big players -- there was a 12 point drop in Manpower a few days ago when they announced weak earnings. This is not due to lack of temp people or temp positions to fill -- seems like companies are still going this route as full-time people in some fields are apparently hard to find. Rather, in my opinion, the problem is a bunch of recent IPOs of temp agencies and also, all (IMO-my belief) full service co's are now struggling to get contracts from fewer large customers. (This is a very difficult systemic issue and problem for OLS, IMO.)
Some of the specialist agencies - Robert Half - are doing great with their specialties in Information Technology or Legal. (Aside: how astute of Ron Baron to sell his stake in OLS last year and buy even more of Robert Half... and how thick of me (and financially impoverishing too) not to have considered this fact more carefully then.)
On the positive side, we have very good value statistics - psr, b/bv, div. yield; there's been a change in some of the top management with new people brought in (I'll give it the benefit of the doubt and just call this positive); and continued financial losses in home health by OLS (OLS is the biggest player)getting some gov't attention and political attention (I believe.) Olsten has a brand name, and it continues to expand its temp bus in Europe (where changing employment laws are seen spurring growth of this business) and South America. They also are growing their professional services operations - expanding their IT, legal, and financial staffing operations-- although this segment is a very small part (by rev.) of their overall business.
Okay... so here we have a beat-up, formally widely-followed-and-owned company (by mutual funds anyway), that looks okay on fundamental numbers for value investors, but may or may not be able to solve its problems... although it is reacting to those problems and trying to overcome them. (And management is (are?) the controlling shareholders. These "fixes" will take yet more time. I wouldn't be surprised if I have to wait another 18 months to 2, maybe 3 years (oh no!--I just hope I can hold on.)to see some profits on my position.
I recall you saying you still own CCN. If you have been willing to hold on to CCN, then perhaps you might also be able to hold onto and profit from, OLS. I guess --and of course IMHO only, that the downside might be about 2-3 points from here and the upside 7-10. Probably a reasonably good bet for anyone with a diversified portfolio and a long-term perspective (that could be you -g-)
Robert Hoefer: If you're out there... as a fellow shareholder (there are only three of us left - Olsten family, Hoefer and Senior)would you have anything to add about OLS?
Paul Senior |
