1. How to use GuruFocus - Tutorials
  2. What Is in the GuruFocus Premium Membership?
  3. A DIY Guide on How to Invest Using Guru Strategies
Dr. Paul Price
Dr. Paul Price
Articles  | Author's Website |

'TrueBlue' looks good on you -- TrueBlue Inc.

December 26, 2007 | About:

TrueBlue Inc. [NYSE] TBI 12/24/07 close: $15.25

52 week range: $14.22 - $28.63

TrueBlue [formerly named Labor Ready] owns various temporary help agencies that provide workers [for Light Industrial purposes] as well as skilled tradesmen. They cater to small and mid-sized businesses rather than giant companies.

Earnings grew nicely from 2001 through 2006 climbing from $0.23/sh. to $1.45/sh. over those 5 years as net profit margins expanded from 1.0% to 5.7% on an overall revenue increase of 47%. Through three quarters of 2007 EPS were up 9.7% year-over-year on just a 2% sales increase.

A pre-announced shortfall for the fourth quarter sent TBI shares tumbling down from a July high of $28.63 to today's $15.25. The newly revised concensus outlook for the full year 2007 is now $1.46 versus last year's record of $1.45 - not exactly a disaster. The current view for the year ahead is for moderately growing earnings of $1.54 /share.

Thus, TBI now trades at 10.5X 2007's and just 9.9X 2008's forward earnings.

TrueBlue had zero debt and held $66.6 MM cash at the end of September.

These shares have generally traded at 18X - 22X earnings during the past 10 years. Even a 16X mulitple on next year's estimates would lead to a rebound to around $25.40 - up more than 66% from the current quote.

Is that an attainable price? TBI [formerly LRW] hit $26.50, $27.75 and $28.63 during each of the past three calendar years.

Risk? The absolute low prices [touched only briefly] in the past three years were: $15.14, $14.94 and $14.22.

How many stocks do you follow that are debt-free, under 10X projected earnings and have 50% - 75% upside?

About the author:

Dr. Paul Price


Visit Dr. Paul Price's Website

Rating: 2.5/5 (6 votes)


Htyen1 - 9 years ago    Report SPAM
i have been looking at this for a while, i was wondering if you have any insight on the competitive advantage of this business on a local scale, meaning couldn't anyone start this business within a local area? i understand tbi has some advantage from a national scale of those companies that are looking for worker on a national level.

Please leave your comment:

GuruFocus has detected 5 Warning Signs with TrueBlue Inc $TBI.
More than 500,000 people have already joined GuruFocus to track the stocks they follow and exchange investment ideas.

Performances of the stocks mentioned by Dr. Paul Price

User Generated Screeners

Rob164Global Banks
samahajoeBasic Materials
kpmoranManual of ideas
MauroTNCAV micro/nano
nghassanPenny Stocks
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)

GF Chat