This was originally published by Frank Voisin. Frank’s value-focused analyses can be found at http://www.frankvoisin.com

Monster Worldwide, Inc (NYSE: MWW) manages a portfolio of websites that connect job seekers with employers in approximately 55 countries. With soaring unemployment for the last few years and a dearth of job postings the company has fallen on tough times, with revenues declining 32.6% in 2009 and roughly flat in 2010.

It seems logical to suppose that MWW’s fortunes would largely tied be to that of the real economy, in that MWW benefits from increased hiring activity, which is aligned with the business cycle. For value investors, the logic often goes something like this: the market often mistreats cyclical companies, putting greater weight on recent performance almost as if any single point in the business cycle will continue into perpetuity (there are a number of behavioural biases that lead us to make this mistake), resulting in expensive valuations at the peak of the cycle, and overly pessimistic valuations at the trough. Consequently, there are often opportunities in the trough. Read More »