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The investment idea that I’m floating in this issue is just that, an idea. But it’s a big idea. Taleo Corporation (TLEO) is a California-based company, founded in 1999, that’s trying to do two huge tasks: First, get companies the talent that they need to succeed; and, second, reduce the cost of an in-house human resources department.
Taleo uses talent management software that is designed to recruit, manage and develop different classes of employees, from Professional to Hourly to Contingency (temporary). Among other tasks, Taleo’s online programs guide clients through recruiting on campuses, complying with labor laws, and transitioning a new hire from candidate to employee.
Clients don’t buy software to perform these tasks. Taleo’s services are web-based, which means clients pay to use only what they need and don’t ever have to worry about upgrading software.
One measure of Taleo’s success is that it has been used by more than 30% of the Fortune 100 companies, including Bank of America, Fidelity, Sony, Whirlpool, IBM and many others. HR departments are an expensive necessity for most big firms, and if Taleo can provide the service without the overhead, the sky’s the limit.
TLEO has an interesting chart, with a nine-month post IPO base giving way to a steep drop in July 2006. But the stock’s progress from that point has been sensational, soaring from 8 to 32 at the beginning of this month. Since then it’s pulled back to 26 (right around the stock’s 50-day moving average), and that looks like a nice buying opportunity.
Emerging Markets Specialist, Analyst and Editor of Cabot China & Emerging Markets Report
A researcher and writer for over 30 years, Paul Goodwin has been a member of the Cabot investment team and editor of Cabot China & Emerging Markets Report since 2005. Under Paul’s stewardship, Hulbert Financial Digest rated Cabot China & Emerging Markets Report the number-one-rated newsletter of 2006 with a 78.6% gain for the year, the number-one-rated newsletter of 2007 with a 74.1% return, and the top-performing investment adivsory for five years with a 17.9% annual return.