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Saturday, March 10, 2007

Westaff may be the Next Private Equity Takeover

Westaff Inc. (WSTF), a NASDAQ traded company based in Walnut Creek, California, is in the business of temporary staffing in the United States, the United Kingdom, Australia, and New Zealand. The company was founded in 1948, and targets clerical, administrative and light industrial staffing into both temporary and permanent positions. The P/E is a little rich at 23 but the price/sales is .15, which is extremely low. There doesn't appear to be any analysts covering the stock. The stock has been stuck around the 4.50 to 5.50 range for the last three month; however, for the last three month and six month time frames, the stock has outperformed its competitors, Adecco (ADO), Kelly Services (KELYA), both traded on NASDAQ, and Manpower (MAN), traded on the New York Stock Exchange.

According to a recent article in the Contra Costa Times, a private equity firm [H.I.G. Capital] and an industry executive [Michael Willis] have purchased almost half the outstanding shares of the company. There isn't much comment from any of the parties involved about what is going to happen next, but it appears that a complete takeover is a strong possibility.

Author does not own the above.

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