SThree Share Price (STEM)

Todays drop seems to be due to Ex dividend .....given the amount of the dividend it seems to be a little too much....hopefully see a bounce within a day or two

Regarding your point about people leaving S3 and setting up, this happens with all agencies but the protection is that big companies (that take a lot of contractors) like to do business with big agencies.

I agree that the opportunity is in technology, there is massive investment and the money is in providing contracting which S3 is good at.

Plus markets like the USA is almost 10 years behind in terms of maturity of recruitment agencies compared to the UK.

"AI is threatening low level jobs" You mean like lawyers and software developers... But yes I get your point.

Interesting to hear an insider perspective.

Steeltrader, please share more thoughts about recruitment in general. I am looking at the whole sector, as its crazy cheap.

From my perspective (someone who would take contracts from a S3 company) I do not see how AI can replace these guys, if anything I think AI is going to be quite troublesome for recruitment. It is going to require a human to talk to a potential candidate, who could have used AI to embellish a CV, or begin learning a subject to appear knowledgeable. The trend for internal recruitment is more down to cost saving, reflecting the current macro. I think once things pick up, companies will go back to being busy with what they should be doing. The better recruiters will be working in commission based roles, and internal recruitment will struggle. The next bull cycle in recruitment is going to be focussed on finding STEM candidates, we just need it to begin. The main issue I see in the short term is the economy. At least S3 is geared to multiple economies, and has plenty of net cash.

Perhaps one slight snag, is that so many people seem to leave S3 and start up on their own, in general at the lower end there are few barriers to entry in the business, but at scale there are only a few players really.

AI is threatening low level jobs but SThree doesn't recruit low level jobs, if anything it is a boost for SThree as they focus on the high level technical roles which will be involved in creating and overseeing AI.

Having worked for SThree and now running my own recruitment agency, my observation is the biggest threat is from internal hiring but that only really impacts permanent hiring whilst SThree are 83% focused on contract / temporary hiring. Most companies who want a contractor do not want to deal with the hassle themselves and go straight to a big agency like SThree, this is where the money is and I believe there is a decent enough moat in terms of work.

Of course though, SThree is very susceptible to an economic downturn but at this price, I think it more that covers a downturn, this price is as if we are already in a deep recession!

As always though, DYOR.