In an earlier piece on Seeking Alpha, "The American Labor Market is Changing and So Should Your Portfolio," I wrote about how the new workforce in America is bullish for the staffing solutions sector.
The record revenues just posted for August by Labor SMART (OTCBB: LTNC) proves that thesis!
Labor SMART, a demand labor firm based in Georgia, just announced that revenues for August 2013 were $2,109,383. Not only is that a record monthly amount, it is a 175% jump from the revenues registered for August 2012. This was also the first time that revenues exceeded $2 million for a month.
For 2013, revenues have already topped $10 million, too, the company announced.
Also of significance is that Labor SMART added 100 new clients in August. Labor SMART has a diverse client base, ranging from small businesses to Fortune 100 companies. Small wonder that both revenues and branches are increasing for the firm!
For investors, the take is that there is a company that has already registered revenues of $10 million in two-thirds of the year only has market capitalization of just $6.59 million. It is tough to imagine Labor SMART being priced so cheaply as TrueBlue Inc. (NYSE: TBI) rose to where it is now around $24 a share.
At a price-to-sales ratio of just 0.59, Labor SMART is selling at more than a 40% discount in the stock price for each dollar booked. By comparison, the price-to-sales ratio for PayChex (NASDAQ: PAYX) is 6.09. For Robert Half International (NYSE: RHI) it is 1.18. The price-to-sales ratio for Labor SMART is well below the industry average, too.
Eventually the stock price should catch up to the rising revenues. The demand labor industry is a $29 billion market that is growing. With record revenues, the share price of Labor SMART should be expected to rise with it!
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.