Labor Smart, Inc. engages in providing temporary blue-collar staffing services. It supplies general laborers on demand to the light industries, including manufacturing, logistics, and warehousing, skilled trade's people and general laborers to commercial construction industries. The company was founded by Christopher Ryan Schadel on May 31, 2011 and is headquartered in Powder Springs, GA.

Labor Smart, Inc.

Consumer Cyclical

The company does not pay dividends at all, or it pays them sporadically. There have only been a few years with dividend payments in the past ten years. 

The stock has been falling steadily in the past six months, losing 57% in total. The stock has lagged its global peers from the same sector and industry (as shown above), underperforming then by 52ppts in total. This is largely true for peers from the same country and sector. With respect to the stock's valuation against its peers, its overall price performance is slightly negative.

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been -0.4 in the past several years. This ratio implies a fragile shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are minimal. In combination with stringent business standards, shareholder rights are very highly protected.

LTNC has very poor trading liquidity. It will take considerable time for the average private investor to sell a common position under normal market conditions. Liquidity may be unstable and becomes extremely unfavourable on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. The stock has a tiny market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is high. Among the negative credit factors, we point to slow historical revenue growth, bleak profitability, negligible return on capital, poor working capital management, inadequate interest coverage, and an unfavourable capital structure. We note low margin volatility and solid cash flow generation, among the positive credit factors. 

In highly turbulent market conditions, LTNC is exceptionally volatile. In other words, the stock will be among the worst-performers in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be critical. 

In normal market circumstances, LTNC is exceptionally volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will change quite unpredictably. The stock's losses on its worst days (less than 1-5% of the time) will range from critical to immense. 

Based on key historical and expected multiples, the stock is undervalued relative to its peers. In particular, the stock is undervalued on P/FCF. 

Labor Smart, Inc.

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Labor Smart, Inc.

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