Volatility reminiscent of the meme stock phenomenon of 2021 is grabbing the headlines. Shares of department store Kohl’s (KSS) surged nearly 90% before plunging more than 25% – all within the same day on July 22. Opendoor (OPEN) surged from $1/share to $5/share and back down to $2/share, all within the past week. While these new meme stocks steal the spotlight, 2Q25 earnings season is picking up steam after banks kicked it off.

With so much happening at once, it’s easy for investors to get swept up in the noise. These are the times when discipline and clarity matter most. Staying grounded in fundamentals, not chasing momentum or headlines, is essential.

Our mission is to equip investors with rigorous, transparent, and reliable research so they can cut through the chaos and make more confident, better-informed investment decisions. The superiority of our research is proven by the outperformance of the Bloomberg indices based on our research.

Our latest Long Idea is a great example of the edge that our superior fundamental research provides. This company is an industry leader, properly aligns executives’ interests with shareholders’ interests, provides high yield backed by ample cash flows, and its stock looks undervalued.

Below, we present a large excerpt from this week’s Long Idea report, available to Pro and Institutional members. You can buy the full report a la carte here.

We’re not giving you the ticker for this pick, but we are happy to share our hard work because we want you to see how good our research is.

This stock offers favorable Risk/Reward based on the company’s:

  • competitive advantages from its proprietary data,
  • industry leading profitability,
  • consistent revenue and profit growth,
  • quality shareholder return backed by strong cash flows, and
  • cheap stock valuation.

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Further Growth Opportunities Abound

This company enjoys strong tailwinds from the growth in its industry.

Fact.MR forecasts the overall HR & recruitment services market will grow 15% compounded annually from 2024 to 2034. More specifically, these segments of the market are projected to grow by the following rates:

  • Management consulting market is forecasted to grow 5% compounded annually from 2025 to 2032.
  • Digital talent acquisition market is forecasted to grow 10% compounded annually from 2025 to 2030.
  • RPO market is forecasted to grow 15% compounded annually from 2025 to 2033.
  • Executive search market is forecasted to grow 6% from 2024 to 2032.

Figure 1: Global HR & Recruitment Services Market Forecast From 2024 Through 2034

Sources: Fact.MR, and New Constructs, LLC.

Top- and Bottom-Line Growth Across Decades

This company has grown revenue and net operating profit after-tax (NOPAT) by 8% and 13% compounded annually since fiscal 1999, respectively. See Figure 2.

More recently, the company improved its NOPAT margin from 8.6% in fiscal 2015 to 9.7% in fiscal 2025 while invested capital turns remained the same at 1.4 over the same time. Rising NOPAT margins drive the company’s return on invested capital (ROIC) from 12.3% in fiscal 2015 to 13.6% in fiscal 2025.

Additionally, the company’s Core Earnings, which is a cleaner and more accurate measure of a company’s earnings, grew 11% compounded annually from $82 million in fiscal 2015 to $228 million in fiscal 2025.

Figure 2: Revenue and NOPAT: Fiscal 1999 – Fiscal 2025

Sources: New Constructs, LLC and company filings

Corporate Governance Aligns with Shareholders’ Interests’

This company doesn’t just advise clients how to build quality compensation and corporate governance, it applies those best practices to its own business as well. Specifically, this company aligns its own executives’ pay with ROIC, the performance metric that is directly correlated with creating true shareholder value.

This company outlines in its proxy statement that one of the most important metrics for its stockholders is “the Company’s ability to allocate and deploy capital effectively so that its return on invested capital exceeds the Company’s cost of capital.”

To ensure executives are held accountable to this key metric, this company includes adjusted ROIC as one of four financial metrics used in determining executives’ annual cash incentives.

We think this company could benefit further by removing some of the flawed metrics, such as adjusted EBITDA margin, from its compensation plan. However, as it stands, the company’s use of ROIC puts its executive compensation plan ahead of many others and earns the company a spot in our latest Exec Comp Aligned with ROIC Model Portfolio.

…there’s much more in the full report. You can buy the report a la carte here.

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