Scott W. Hood, CFA, is CEO and portfolio manager at First Wilshire Securities Management, Pasadena, California, which manages $410 million. FirstWilshire.com
Today’s Stock of the Week has had a rough time lately, and that’s one reason the price seems right. Keep reading to learn more.
Volt Information Sciences Inc. (VISI) is one of the largest staffing companies in the US, serving Fortune 500 companies globally by providing personnel and services in information technology and other technical areas. Volt’s clients include 41% of the Fortune 100, with an average relationship length of 25 years. But about five years ago, Volt ran into tough times due to bad acquisitions in unrelated fields…loss of customer focus…and accounting restatements—which now could present a buying opportunity as the company is restructuring for the better.
New management has come aboard in key areas and refocused the company on its core staffing business. Revenue was $1.5 billion in 2015 and likely will be $1.35 billion for 2016 before starting to recover, reaching $1.4 billion in 2017. The firm has $180 million in receivables and has started rebuilding its cash and paying down debt, partly by selling some buildings and leasing them back and also selling noncore businesses. Management is strong and highly motivated, and clients are beginning to come back.
Earnings per share: 2017 est./$0.45… 2016 est./–$0.80…2015/–$1.18. (Fiscal year ends October 31.)
Scott W. Hood, CFA, is CEO and portfolio manager at First Wilshire Securities Management, Pasadena, California, which manages $350 million. FirstWilshire.com