This column is for investors willing to take more risk and potentially receive more reward.  The stocks mentioned in this column are not recommended to buy or sell.  They're brought to your attention so you can investigate them further to determine if they fit your risk profile.  Most of the stocks will have less than $1 billion of market capitalization, have more volatility than other stocks, and oftentimes no earnings.  And some will have tremendous stories.

January 23, 2009 - On Assignment, Inc. (ASGN-NASDAQ) is a professional staffing firm, providing flexible and permanent staffing solutions in the United States, Europe, Australia, and New Zealand. It offers clients with short-term or long-term assignments contract professionals, contract-to-permanent placement, and direct placement. The company operates in four segments: Life Sciences, Healthcare, Physician, and IT and Engineering.

Healthcare offers locally-based and traveling contract professionals comprising nurses, specialty nurses, health information management professionals, dialysis technicians, surgical technicians, imaging technicians, x-ray technicians, medical technologists, phlebotomists, coders, billers, claims processors, and collections staff. It serves healthcare clients, including hospitals, integrated delivery systems, imaging centers, clinics, physician offices, reference laboratories, universities, managed care organizations, and third-party administrators.

The Physician segment provides short and long-term physician staffing services and permanent physician search and consulting services.

IT and Engineering offers consultants with expertise in information technology, hardware, and software engineering, as well as mechanical, electrical, validation, and telecommunications engineering fields. The company was founded in 1985 and is headquartered in Calabasas, California.

This stock is small, about $150 million in market cap. And volatile. In 2005, the stock went from a low of $4 to a high of $12.20 in a manner of months. It stayed near that higher level until late in 2007 and early 2008 when it cratered to $5, rallied back near $10, only to finish near $4. It's come up from that low, and the question is: can it get back to $12 or even higher?

Earnings have been erratic. In 2002, they hit 66 cents a share, down from 82 cents in 2001. Then in 2003, they went negative by 8 cents a share. In 2004, they went into a deeper shade of red: 35 cents. 2005 was a flat year, zero earnings. In 2006, earnings went to 29 cents but fell back to 26 cents in 2007. For 2008, analsyts see 56 cents a share, and for this year, 50 cents. So owning this stock means volatility in earnings. That usually means volatility in a stock's price as well. Analyst estimates call for earnings to increase, on average, by 15% annually.

Even with a pronounced slowdown in the economy, the healthcare field is somewhat exempt from job layoffs. Doctors are still in strong demand, as are skilled nurses. When people are ill, they need help. It's not discretionary spending to buy drugs or medical care. The other divisions, particularly Information Technology will most likely not fair as well. Companies are paring back where ever possible, and IT spending will definitely be lower in 2009. Similarly, the life science group should see lower demand from smaller R&D budgets.

But On Assignment has carved out a niche in the employment services universe that should prove profitable, even in these troubled times. It has limited exposure to permanent-placement jobs, low client concentration, and a thoughtful focus on markets that aren't as economically sensitive that require highly trained professionals.

More numbers: Price to Sales is .26. Price to Book is .76. For the last 12 months, Operating margin was 6.61% and Profit margin was 2.84%. Return on Equity was 8.7%. Revenues for the last year were $622.47 million. There's $48.7 million in cash in the bank. Total debt is $136 million. Total Debt to Equity is .636. The current ratio is a very healthy 3.12. Book Value per share in the most recent quarter was $5.99. Beta (speaking of volatility) is 1.32. There are 35.70 million shares outstanding. Insiders own 3.55%. There is no dividend.

Look deeper into On Assignment if volatility and smallness don't scare you. It's doing something right. Revenues have increased every year since 2005, going from $238 million to a current run rate of $630 million for 2009. It's just those erratic earnings that make one pause.

Company Web site: www.onassignment.com

- Ted Allrich