Long/short equity, deep value, value, special situations

Corporate Resource Services: Closely Held, Unrealistic Expectations, And Few Options; Build Short With 50-70% Return Possible


Corporate Resource Services, Inc. (NASDAQ:CRRS), formed in 2005, is one of youngest players in the temporary staffing industry and likely the most overvalued. Over the last 12 months, CRRS recorded $640 million in revenues and an incredibly poor EBITDA margin of 0.6%. However, it is currently trading at $4.00 per share for an enterprise value of roughly $550 million. At this valuation, the company is trading at a 48x EV/LTM EBITDA multiple and a 0.8x EV/LTM Revenue multiple. While the business is wildly overvalued both on a relative and intrinsic value basis, the key to this story is that it is a closely held entity - less than 9% of shares outstanding are held by the public....

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