Staffing 360 Solutions (STAF): Connect the Dots, and You’ll Like the Picture

It’s not blatantly observable anywhere. But, for anyone willing to connect the dots and do the digging in several places, the message is clear — there’s a huge and fast-growing need for more information technology workers, and that plays right into the hand Staffing 360 Solutions Inc (NASDAQ:STAF) is holding.

There are several data nuggets that point in the same direction, but perhaps none as telling as the recent finding from technology research outfit IDC, which found that by the end of 2017, two-thirds of the CEOs of Global 2000 companies will have digital transformation at the center of their corporate strategies. How are they going to make that happen? Deloitte recently posted some research of its own that should shed some light on the idea. The giant accounting form observed that “In order to maintain the competitive pace of innovation, companies find themselves engaged in a global war for talent.”

That’s a trend also observed by the Department of Labor, which in its 2014-2024 occupational outlook handbook noted: “Employment of computer and information technology occupations is projected to grow 12 percent from 2014 to 2024, faster than the average for all occupations. These occupations are expected to add about 488,500 new jobs, from about 3.9 million jobs to about 4.4 million jobs from 2014 to 2024, in part due to a greater emphasis on cloud computing, the collection and storage of big data, more everyday items becoming connected to the Internet in what is commonly referred to as the “Internet of things,” and the continued demand for mobile computing.”

Great, but what’s that got to do with Staffing 360 Solutions? Everything.

Staffing 360 Solutions is a young and enterprising IT staffing firm that, for the record, is getting real big, real fas, by smartly and cost-effectively acquiring its way into a size and scale by converting a fragmented and less-effective (and less profitable) group of similar staffing agencies into a cohesive, more profitable singular unit.

And it’s paying off. Staffing 360 Solutions generated $47.8 million worth of revenue last quarter, turned $8.5 million of it into a gross profit, and turned $1.8 million of that into an EBITDA profit. Those were, respectively, improvements of 33%, 34%, and 184% compared to the same quarter a year earlier. Net income improved too. The net loss of $1.3 million was 27% smaller than the net loss of $1.7 million booked in Q1 of fiscal 2016. Profitability – real profitability – is within reach. STAF simply has to stay on the trajectory it’s on. A couple more acquisitions and a little more organic growth could do the trick.

Of course, the broad rising tide of more and more IT workers is helping a bunch too.

STAF is simply in the right place at the right time, and present an underestimated, overlooked growth opportunity.

Investors interested in learning more about Staffing 360 Solutions can visit the company’s website here. It’s got several investor-centric publications available.

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