File it under Christmas Miracle: French Connection.
The 10th stock in our annual Christmas Countdown is Resources Connection (RECN).
“Bon pour vous revoir, Monsieur Manifest!
“It’s good to see all of you again this year. Did you all have a nice flight across the Atlantic?”
“Oui. You know that Vaudeville comedy line … I just flew in from [fill in the blank] and are my arms ever tired? Well, in this case, our arms really are tired.”
“Perhaps you should check Air France on Expedia next time?”
“Enough with the idle bavardage, is Woodward around this year?
“I’m sorry. Bob sends his avoir du remords. I’m sure he’s either pecking away at a keyboard or getting ready to revel in some New Year’s balls to prepare for the inaugural balls.”
“(Giggle) You said pecking.”
“Calm down. What have you got for me this year?”
“Get over it. Or we’ll talk American Fries.”
“Make our day, homey. That kind of battle would make Napoleon smile.”
“C’mon … your selection of Vistaprint two years ago hasn’t worked out so well — at least not yet.”
“(Cackle) Rude American!”
“Hey … the numbers speak for themselves.”
“They’re still rude numbers. This year we kinda like Resources Connection (RECN). It’s a former division of Deloitte & Touche and that sounds French enough to us.”
Resources Connection operates under the name Resources Global Professionals and provides finance, accounting, risk management, internal audit, information technology, human resources, supply chain management and legal professionals to clients on a project basis. It has 82 offices in 20 countries.
Looking back over the last several years, it’s clear this company is attempting something of a “retool” and the global recession put quite a dent in 2009.
If RECN can achieve anything approaching 6-8% growth and deliver 7% bottom line margins while achieving a projected average of 19-20x, a long-term return forecast of 20% is feasible. The Value Line low total return forecast is 24%.
Value Line analyst Kenneth DeFranco Jr. referred to Resource Connection’s prospects over the next 3-5 years as “intriguing.”
“We like Monsieur DeFranco — no matter how tired our arms are. Fascinant! Bizarre! Curieux! Kenneth is welcome in Paris any time. Bring him with you next time. Don’t forget the wine.”