Staffing 360- The Best Company; The Worst Stock

Year 20- What a Crazy Journey

This edition marks the first of 2017- my 20th consecutive year of publishing. The big picture? - the first 10 years were a far friendlier environment for micro cap stocks- during the second 10 years huge winners were fewer and farther between.

In my view, the regulatory environment for small stocks in the last 10 years is the culprit. The SEC has teamed up with FINRA to wipe out all the small brokerage firms. In addition, FINRA has led an attack on brokerage firm participation in the clearing of small company shares.

Hence- in this environment it has become extremely difficult for small companies to raise capital- the fuel they need to drive growth. Therefore, there have been fewer companies with a real opportunity to succeed.

As we all know, the only constant is change, and the pendulum always swings. I'm hopeful under the new Trump Administration the pendulum will swing back, and risk capital will once again flow under some new rules and regulations that foster risk taking.

There's a lot of hope the new regulations for Crowd Funding will provide the necessary capital to help smaller companies grow. These new regulations allow companies to advertise investment opportunities directly. It's still in its infancy, so we'll have to watch for success stories.

Now, on to a situation I hope comes to life in 2017- there's every chance. Read on McDuff.......

Staffing 360 (NASDAQ: STAF)- The Best Company With the Worst Stock

I have to give Staffing 360 (NASDAQ: STAF) the award for Best Company; Worst Stock of all time.

Four years ago this company was just a concept. Today its annual revenue run rate is $190 Million. The company is probably generating about $5 million in EBITDA profits. STAF also graduated from the OTC to the NASDAQ in 2016.

Yet, the price of the stock is within a few cents of the all time low, and the valuation of the company is only about $8.5 million. There's only one word to describe the stock price- PATHETIC.

And, of course- there's an underlying cause. STAF took on debt to acquire the Temporary Staffing companies that make up its components, and the company has not been successful at either managing or retiring its debt.

In 2016 STAF chose to deal with maturing debt by simply issuing free trading shares to the debt holder. By public company standards there are very few shares I&O, but there's still a perception the company will just continue to issue free trading shares to pay down the debt coming due in 2017. And- of course the market knows the lower the price of the stock, the more shares that have to be issued. Hence- STAF has been a favorite target of short sellers.

My expectation- the stock is incredibly undervalued, but will continue to struggle until the company comes up with a different solution to retiring its debt that is coming due.

FY Q2 Numbers Pre Announced

To ring in the new year, yesterday before the market opened, STAF pre announced its FY Q2 numbers. The company disclosed the quarter ending at November's end would show $47 million in revenue and $8.1 million in gross profits.

In addition, through the first 6 months of FY'17, STAF generated $95 million in revenue, a 23% increase over the 6 months in the previous year.

As compared to the previous quarter, revenues and gross profits are down just ever so slightly, which is really a non event relative to the price of the stock.

Here's the long term picture of outstanding growth:

Where To From Here?

As you can see from this chart, shares of STAF cannot find any footing. In spite of yesterday's positive announcement, the stock continues to go nowhere.

The problem is not the top line or gross profits- it's the debt. And, it's not an overwhelming amount of debt. According to the last quarterly filing, STAF's long term debt is only $3.86 million. The problem is as follows- most or all of this debt is coming due in 2017, and the market is assuming the worst on how the company will deal with it- by simply issuing free trading shares to pay it off, which will be sold immediately, thereby depressing the price.

I'm hopeful STAF will announce some alternative method for dealing with its debt in the near term. That might just be the catalyst this stock needs to light a fire under the price.

Text the word PROFITS to 86677 for instant delivery of the OTC Journal to your smart phone.

Email is not as reliable as it used to be. This will insure you receive each edition promptly.

MarketByte LLC was been paid a fee of 10,000 newly issued restricted shares for coverage of Staffing 360 in 2015. The aforementioned shares have become free trading under Rulle 144 and liquidated. An additional 17,500 newly issued restricted shares and $2500 in cash has been paid for extension of coverage in 2016. The 17,500 shares are now free trading and held in street name at a brokerage firm.



The OTC Journal Newsletter is an electronic publication committed to providing our readers with useful information on publicly traded companies. The Newsletter contracts with publicly traded companies and receives compensation from them or third parties as payment for publishing information and opinions about the company and the trading market for their securities. Principals of the Newsletter may also purchase or sell securities of the companies in the open market from time to time. The positions, if any, that the Newsletter or its principals presently maintain in the securities of the companies are disclosed here (click here) and should be considered in making an investment decision regarding these companies securities. The Newsletter and its principals reserve the right to acquire additional shares or liquidate some or all of the positions they may hold in the issuer’s securities at any time in the future without further notice. These publications should not be considered to be independent publications concerning the company.

All statements and opinions expressed herein are those of the editors and are subject to change without notice. The Newsletter maintains editorial control over its publications and the companies profiled therein do not have any editorial rights concerning the information published about them. While we believe all sources of information provided by us and contained in our publication to be accurate and reliable, we cannot and do not guarantee the accuracy of information we received from third parties.

We encourage our readers to invest carefully and read the investor information available at the web sites of the Securities and Exchange Commission ("SEC") at and/or the National Association of Securities Dealers ("NASD") at We also recommend that you read the SEC advisory to investors concerning Internet Stock Fraud, which can be found at Readers can review all public filings by companies at the SEC's EDGAR page. The NASD has published information on how to invest carefully at its web site.

The information found in this profile is protected by the copyright laws of the United States and may not be copied, or reproduced in any way without the express written consent of the editors of


You can unsubscribe from this list at any time by Clicking Here. If you are having difficulty removing yourself or wish to change your address please go to