Should You be Confident in Robert Half (RHI)?

Palm Valley Capital Management, an investment management firm, has released the “Palm Valley Capital Fund” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. In the third quarter, Palm Valley Capital Fund appreciated 2.35% compared to a 9.11% gain for the S&P SmallCap 600 and a 7.99% rise in the Morningstar Small Cap Total Return Index. At the start of the quarter, the Fund invested 73.5% in cash equivalents, increasing slightly to 74.1% by the end of the quarter. Small-cap stocks performed ahead of large caps during the period, with the anticipation of Fed easing and reduced concerns about the impact of tariffs on corporate profits. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its third-quarter 2025 investor letter, Palm Valley Capital Fund highlighted stocks such as Robert Half Inc. (NYSE:RHI). Robert Half Inc. (NYSE:RHI) is a talent solutions and business consulting services provider. The one-month return of Robert Half Inc. (NYSE:RHI) was -5.28%, and its shares lost 50.64% of their value over the last 52 weeks. On October 7, 2025, Robert Half Inc. (NYSE:RHI) stock closed at $33.16 per share, with a market capitalization of $3.374 billion.

Palm Valley Capital Fund stated the following regarding Robert Half Inc. (NYSE:RHI) in its third quarter 2025 investor letter:

"Robert Half Inc. (NYSE:RHI) provides staffing and consulting services through the Robert Half and Protiviti brands. The firm specializes in finance and accounting placements and also provides labor for technology and office roles. Results have been pressured by weakness in the staffing industry, which has disconnected from the greater labor market due to unique features of the post-COVID economy. Additionally, some investors have concerns about the ongoing demand for finance staffing if AI displaces certain jobs.

While Robert Half’s staffing trends have mimicked the industry, overall performance has been supported by strong trends for the Protiviti consulting segment, which has effectively leveraged Robert Half’s resources into winning share against Big Four competitors. Although trailing results for the entire company are below normal, Robert Half remains profitable and cash generative. It has zero debt and offers a 7% dividend yield, which is supported by cash flow. The company’s target white collar market could experience a delayed demand trough versus blue collar temporary labor, but we are confident Robert Half will be an industry survivor."

Robert Half Inc. (NYSE:RHI) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 34 hedge fund portfolios held Robert Half Inc. (NYSE:RHI) at the end of the second quarter, which was 27 in the previous quarter. In the second quarter of 2025, Robert Half Inc. (NYSE:RHI) reported enterprise revenue of $1.37 billion, which was 7% down from Q2 2024. While we acknowledge the potential of Robert Half Inc. (NYSE:RHI) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Robert Half Inc. (NYSE:RHI) and shared the list of safest dividend stocks to buy. In addition, please check out our hedge fund investor letters Q3 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.