For companies looking to hire and groom executive talent, executive search firm Korn Ferry (NYSE: KFY) is often a no-brainer. It has been ranked as the top executive search firm since 1990 and operates 80 offices across the globe. 

Now, it’s in the right place at the right time.

#-ad_banner-#As of late last year, IDC had estimated employers were spending around $20 billion per year to attract, assess and retain workers in the wake of a recovering job market.

Around halfway through 2015, the job market continues to recover. The U.S. unemployment rate is currently 5.3% — the lowest rate in seven years — and according to Mark Zandi, the chief economist at Moody’s Analytics, the growth in U.S. employment should continue in “high gear.”

Since Korn Ferry provides a variety of products and services for employers, a booming job market means booming demand.

A Closer Look at Korn Ferry’s Strong Fundamentals 

One thing that Korn Ferry does as a recruitment specialist is publish interview guides and software that helps managers identify and cultivate employees with high potential.

More specifically, many of the company’s services and instruments help companies identify people with what it terms “learning agility.” This is defined as a willingness to grow and learn, topped with insatiable curiosity. Korn Ferry argues that effective executives and important sources of corporate growth — such as the ability to tap new markets and develop innovative solutions — require this attribute. Since the attribute is narrowly distributed in the overall population, Korn Ferry’s services are that much more enticing.

That’s just one reason the company claims use of its services translates directly to its clients’ bottom lines. The even better news: Helping clients grow their bottom lines offers a solid bottom line for Korn Ferry as well.

Let’s start with revenue, though. In the fourth quarter of 2015, which ended April 15, revenue tallied $272 million — up almost 8% from $252 million in the comparable year earlier period.

Revenues in the key North American division, which accounts for roughly 60% of the company’s total, expanded from $146 million to $162 million — a gain of nearly 11%.

With approximately 18% of revenues derived from clients in financial services, 15% in technology, 20% in life sciences and 16% in consumer goods, Korn Ferry is also well diversified across the spectrum of U.S. business.

For fiscal 2015, that sales strength translated to earnings of $1.90 per share. Analysts who follow the company anticipate this amount will grow 7% in 2016 to $2.04 per share, while an additional 10% expansion is slated for 2017.

That earnings growth is especially appealing relative to the stock’s value. Zacks Research agrees, arguing the company is a strong value play based on its low price-to-cash-flow (P/CF) ratio, recent upward earnings estimates revisions and competitive forward price-to-earnings (P/E) ratio.

Technicals Support the Bullish Case 

On top of boasting strong fundamentals, Korn Ferry looks quite appealing technically.

As the four-year chart above shows, KFY has strengthened in conjunction with improving U.S. employment. Just a few years ago, the shares went through a complex bottoming process, landing just above $11 in 2011 before reaching $12 in mid-2012 and climbing just shy of $13 late in the year.

As 2012 ended, KFY finally broke a nearly year-long downward trendline.

Between late 2012 and May 2014, shares showed significant gains, nearly tripling in about 18 months and finally peaking between $32 and $33. For several months, the stock went sideways with strong support just above $27. Finally, in late September 2014, KFY broke its long-term upward trendline and retreated to near $24.

I used that September 2014 low near $24 to draw the current upward trendline. The stock was probing a new all-time high this past March, but ended up moving sideways until June.

That’s when Korn Ferry was finally able to break through resistance and attain its recent high above $36 — and why I’m so bullish now. With this breakthrough, the stock bullishly completed an ascending triangle formation that lasted almost one year. Shares have consolidated in a narrow range for the past several weeks, but they’ve remained above support near $33.

The trendline off the September 2014 low intersects the chart near $33.50. These technicals afford traders two levels of protection: First, the upward trendline is now almost a year old. Second, old resistance makes for new support, with the shares likely finding buying interest at about $33.50. To add a buffer for safety, I have set my stop-loss at $31.89.

In terms of setting a target, the height of the ascending triangle pattern is $8.60 (approximately $24 to $32.60). Adding $8.60 to the breakout level around $32.60 gives us a target of $41.20.

All in all, KFY is set to continue moving higher thanks to its combination of fundamental and technical strength. What’s more, I really like that we’re only risking 8% for a potential 19% gain, better than a 2:1 risk-reward ratio.

Recommended Trade Setup:

— Buy KFY at the market price
— Set stop-loss at $31.89
— Set the price target at $41.19 for a potential 19% gain by Q2 2016 

This article was originally published on ProfitableTrading.com: A Low-Risk, High-Profit Play on the Booming Job Market​