Do The Best-Companies-To-Work-For Make Great Investments As Well? Part 1
May 23 2017 - Thoughts@Stockal
Walt Disney, in one of his iconic comments, said this about Curiosity: “We keep moving forward, opening new doors, and doing new things, because we’re curious and curiosity keeps leading us down new paths.”
We recently came upon this list of Best Places To Work For from Glassdoor (which has become, arguably, the most relevant employee feedback and company rating platform we have today) and wondered if these companies are also great investing bets. It’s natural to feel that companies where people love working are also places where they give their best – leading to the high customer satisfaction, revenues and positive stock reaction. So we looked at the top 10 public companies from this list and what follows is a brief of our key findings about each.
In the first of our 2-part series, we analyze Facebook, Google, Adobe, Clorox and Paylocity:
Facebook scores 4.5/5 on Glassdoor. Some of the common themes emerging from its employee comments are “fast paced”, “fair”, “women friendly”, “great perks”, “collaborative”, “solid engineering” etc.
Wall St opinion (reflected by Stockal’s Confidence Meter) for FB has been consistently north of 65% (bullish), being at 73% for the best part of the last 90 days and settled at 68% for the last month or so. Over the last 1 year, the FB stock went up from around $115 to $152, rising from $135-odd to the current price levels in just the last 3 months.
The company beat analyst projections on its last earnings announcement and projected to continue doing well. And, with the avg price target at $157.8, there might still be some upside in the stock.
There seems to be no stopping Google. Consistently growing revenues, a pole position or an emerging threat in every other industry, transcending multiple sectors, themes and areas of business, Google is one of the 2-3 companies set to dominate most facets of our daily lives.
Google scores 4.4/5 on Glassdoor. One of the interesting themes that seem to emerge from Google’s employee comments is that it’s a “big company” with a small company culture – which also means that it’s definitely more demanding than most other “big” companies, but people find their roles here more meaningful.
Looking at the stock, GOOG has gone from $722 to a whopping $941 in just the last year. That’s an over 23% rise – quite awesome for a bluechip stock! In our observations, the Confidence Meter for Google stands at 73%, and Wall St has been THAT bullish for the last 4 months. Stockal’s avg price target (interestingly, set in Feb 2017 when the price was still ~$800) for Google is $951.60.
Glassdoor score: 4.0/5
Is the world becoming more creative? Or is it expressing itself more? Better? While these are up for a debate, one thing is for sure – there’s a generally increased focus on design and user experience all around us. Products are looking nicer, and growing more useful, just as people are growing relatively impatient and seem to have less time for almost everything than earlier.
To be sure, Adobe has been able to maintain its dominance in the creative design workflow. It’s move to the cloud was also very timely, one might say. Just at the time when SaaS (Software as a Service) business models were being rewarded with high multiples.
The stock has gone up more than 43% in the last one year. While 2016 was a generally nice year, with a near 15% growth, 2017 has already seen ADBE grow 30% in the last 5 months.
At the same time, Confidence Meter has been hovering above 70% and now stands at a healthy 78%. The Wall St set a price target of $138.88 a couple of months back and the stock has almost reached it now. It will be interesting to see how much more room for growth the stock has. Important to note that the Revenue Prediction for Adobe is still positive so we are likely to see q-on-q revenues grow for the rest of the year.
Glassdoor score: 4.2/5
Interestingly, people in R&D seem to the most vocal Clorox employees on Glassdoor. While overall ratings are great, individual reviews actually seem to be mixed. But it’s certainly appearing as a place where people stay for longer periods of time than most of their tech industry brethren.
The stock has also been a mixed performer. 2016 was not a stellar year. CLX went from a high of $138 all the way down to $113 in the second half of the year. It started recovering, though, towards the end of the year and rallied back to $138 in Mar 2017. It has settled in the lower 130’s since. For the keen momentum investor, the stock has given about 20% returns in the last 6 months but if you are a long-term investor who came in around $120 in Oct 2016, you’ll be happy you’re out of jail!
Stockal’s Confidence Meter stands at 46% (quite neutral) with the price target at $130.17. But the revenue prediction is patently positive so it should be interesting to observe the stock as the next earnings announcement nears.
Glassdoor score: 4.4/5
Another SaaS company. The payroll software provider has obviously done a great job of managing its own employees. “Forward looking”, “good tech culture”, “rapid growth” are some of the emerging themes here.
The stock has been a net-gainer, going from $38 to $44 over the last one year. But it did have it’s lows – ending 2016 at $30.01. Must like the rest of the market, PCTY bounced back since then and has gone up a good 46%.
While Stockal has a neutral Confidence Meter for the stock – 54% – the latest price target stands at $48.40, so watch! Again, a great reflection of positivity is the growth in Revenue Prediction for the rest of the year.
So there you have it, 3 out 5 have done exceptionally well. 1 has done very well in the last 6 months and another one has been a bit of a laggard. But we’re not making any conclusions just yet. Let’s see what Part 2 holds for us when we analyze Salesforce, Forrester, Intuit, Delta Airlines and Akamai.
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