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Thursday, October 29, 2020

Staffing Group Ltd (OTCMKTS:TSGL) Pops Higher on Preliminary 2016 Data

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Staffing Group Ltd (OTCMKTS:TSGL) is a penny stock in the staffing space that’s clearly begun to spur some interest among players in the marketplace as shares bounce up off recent lows. The jump in trading activity is related to company reports that hint at preliminary results for the full year ended December 31, 2016. For fiscal year 2016, the company expects to report revenue of approximately $4.2 million and a gross profit of $1.36 million, representing a 32% gross profit margin.

“Our business performed extremely well in 2016. While we are actively seeking acquisition opportunities, we also expect to drive revenue growth organically through locations we currently operate and by opening additional locations throughout fiscal 2017,” stated Kim Thompson, the Company’s Chief Executive Officer. “I am excited about our growth prospects for 2017 and look forward to sharing our annual goals with shareholders in future communications.”

Staffing Group Ltd (OTCMKTS:TSGL) bills itself as a company that is an emerging public company specializing in leveraged buyout transactions and restructurings with a focus on various verticals within the U.S. $115 billion dollar staffing industry.

The Staffing Group, Ltd. is executing an aggressive buy-and-build strategy through the acquisition and integration of small to medium-sized staffing businesses with focus on the light industrial, engineering, manufacturing and construction staffing space. The Company believes the light industrial staffing segment is ripe for consolidation and will seek accretive acquisitions that will drive annual revenues to $75 million within the next 3 years.

According to company information, “The Staffing Group, Ltd. is executing an aggressive buy-and-build strategy through the acquisition and integration of small to medium-sized staffing businesses with focus on the light industrial, engineering, manufacturing and construction staffing space. The Company believes the light industrial staffing segment is ripe for consolidation and will seek accretive acquisitions that will drive annual revenues to $75 million within the next 3 years.”

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The chart shows about 280% added to share values of the company over the past week of action, but this action is running counter to the larger trend in the name. That said, TSGL has a track record that includes a number of dramatic bounces. Furthermore, the name has seen an influx in interest of late, with the stock’s recent average trading volume running a bit less than 1300% beyond its prior sustained average level.

In addition to the preliminary results, the company also just put out some objectives for the year ahead. According to that release, the Company is aggressively seeking acquisitions throughout the Southeast U.S. The goal for 2017 is to complete revenue acquisitions totaling $7 million on an annualized basis.

While the Company expects to remain acquisition-centric, it has also identified opportunities for organic expansion. The Company seeks to establish four additional locations throughout Alabama, Indiana, Georgia, and North Carolina, beginning with Birmingham, where they expect to “officially launch operations and service the first client before the end of the first quarter of 2017.”

The Company anticipates the opening of one new location per quarter in 2017. These additional locations will nearly double the Company’s presence in the staffing marketplace. Kim Thompson, the Company’s Chief Executive Officer, stated, “My team has worked very hard refining our processes, how we go to market, and our customer service strategy. Our expansion plans for 2017 will leverage our already existing platform and position us for the next stage of growth.”

Currently trading at a market capitalization of $0.9M, TSGL has a reserve ($221K) of cash on the books, which is balanced by about $3.6M in total current liabilities. One should also note that debt has been growing over recent quarters. TSGL is pulling in trailing 12-month revenues of $6.4M. However, the company is seeing declines on the top line on a quarterly y/y basis, with revenues falling at -58.3%. We will update the story again soon as further details emerge. For continuing coverage on shares of $TSGL stock, as well as our other hot stock picks, sign up for our free newsletter today and get our next hot stock pick!

 

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