Undervalued Small Cap Stock To Buy Report
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The report features undervalued small cap stock with significant upside potential:
Labor SMART Inc.
Stock Symbol: LTNC
Visit the Labor SMART Corporate Site — LaborSMART.com
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Labor SMART, Inc. (OTCBB: LTNC) is an on demand provider of unskilled and semi-skilled labor based in Hiram, GA. Since 2011, the Company has become a leader in providing short-term staff for small and large companies.
Because of their unique and ongoing analysis of their geographic service area needs, they can deliver nearly 10,000 qualified, reliable, and flexible prescreened W2 employees. LTNC workers are experienced in a wide range of skill sets including, but not limited to: event services, construction, hospitality, warehouse, retail, demolition, landscaping, flood and fire restoration, and manufacturing production.
Unlike most other temp agencies, because of LTNC’s ongoing prescreening programs they can supply 10-100 people on the spot for concerts, conventions, catered and sporting events. The Company works directly with several professional sports teams and vendors, hiring about 1000 workers for games. There is an increasing demand for qualified help at major league ballgames and the Company anticipates to increase it’s clientele in this market.
Another valuable service Labor SMART offers is “Just in time” staffing for emergency and disaster response. According to CEO Ryan Schadel, who has 13 yrs experience in the staffing industry, “Nature is very short notice.” In a matter of hours, crews of workers can be on the road to the disaster front. There are very few temporary agencies that can deliver hundreds of people for a job at a moment’s notice. In the event of natural disasters such as hurricanes, tornados, and floods specialized crews will be there to pick up the pieces.
Staffing Market Outlook
In the domestic workforce 2% of those employed are currently represented by a temporary agency, accounting for about 2.9 million people. By 2018, the need for temporary labor is anticipated to reach 6.3 million (Forbes, 2014). According to CareerBuilder, 42% of employers hire temporary or contract workers, with a projected increase of 6-7% in 2014.
Labor Smart addresses and fulfills some of the fastest growing temporary job categories in demand; Construction Labor (#3), Maintenance/Repair workers (#7), Truck Drivers (#9) and Machinists (#10) (Forbes, 2014). In addition, the Company currently provides labor in three of the top ten cities demanding workers for temporary jobs; Atlanta, Orlando and Indianapolis.
Financial Highlights and Outlook
There is a positive outlook of $2.2 million in additional revenue in 2015 from the acquisition of Kwik Jobs, Inc. in 2014. YOY in September there was a revenue increase of 29.16%. Revenue growth has been steady for twenty two consecutive months and the Company has demonstrated a proven ability to keep profit margins growing. Currently, revenues continue on a steadily increasing pace, exceeding expectations in September by reaching $18 million. The outlook for 2015 is to surpass the revenue goal of $600K/week.
Gross margins increased in 2014 from 17% to 22.2% YOY rising to $2.70 million. In 2014 net income increased $2.27 million YOY. In 2014 there was an increase in Total Current Assets of $1.22 million and revenue by $9.48 million respectively.
From inception in 2011, the Company has grown from two to thirty one locations. For 2016, the growth plan is to expand to one hundred offices across the United States. Labor SMART projects growth of 30-40% per year from new locations with a forecasted revenue of $150 million in 2017.
Due to the demand of these rare to find skilled labor forces, the premium that Labor SMART gets paid by it’s large client base is top-dollar for providing immediate services. The Company is diverse from their competition because they fill a niche that traditional temporary agencies typically do not. They offer “ready to go” workers, reducing downtime and turnover, meeting deadlines and bridging gaps when there is a shortage of qualified people to do the job.
Labor SMART Operating Locations
Labor Smart has thirty one locations in fourteen states in the Southeast U.S. Current offices are located in Florida, Indiana, North Carolina, South Carolina, Missouri, Louisiana, Georgia, Mississippi, Tennessee, Kentucky, Colorado, Alabama, and Oklahoma. In September 2014, Labor SMART acquired 2 locations of Kwik Jobs, Inc. in Alabama and Georgia that specialized in providing temporary contractors in the construction and logistics businesses.
Labor SMART Expansion Parameters
Labor Smart’s historic growth has primarily occurred by opening and developing new offices from scratch. However they also survey and research targeted new cities for potential acquisitions within Labor Smart’s specific operating parameters. Strategic acquisitions are desirable for both the immediate realization of revenue at minimal office startup costs, and the reduction of local competition.
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