In today’s Daily Alert, Contra the Heard‘s Benj Gallander provides us with an update on his Top Pick for 2012, a company in the midst of a turnaround that recently changed its name from Teamstaff (TSTF) to DLH Holdings Corp. (DLHC).
“TeamStaff’s (TSTF) comprehensive turnaround continues with a name change to DLH Holdings Corp. (DLHC). Founded in 1969, this enterprise recently went through some difficult times, but in 2010 CEO Zach Parker arrived and embarked on a clear transformation plan.
“In order to expand operations, this healthcare solutions provider that focuses on government contracts did a rights offering that raised better than $4 million, with insiders picking up a major stake. Still, the share count remains below 10 million. Though not yet signed on the dotted line, it appears that a deal with the Presidential Financial Corporation will double the company’s borrowing potential to $6 million.
“Both revenue and the backlog remain in growth mode and the recent quarterly loss was pared to less than $1 million. The balance sheet has negligible debt and revenues are north of $40 million. A suitor could pay a 100% premium in this consolidating sector and only fork out around $25 million. That is certainly not out of the question. This company traded above $5 for years and if the turnaround is successful, that would register a triple from this level.”
- Benj Gallander, Contra the Heard, July 5, 2012