Today our lightning pick is PRG Group Inc. (PINK:PRGJ), which closed at for less then one penny (.0087) Friday night. PRGJ is an IT company that recently secured a $4 million Federal Government Contract. This contract should triple the size of the business, but has not yet been reflected in the stock price. According to their most recent filings, PRGJ currnetly has a market value of just a little over $1 million dollars. The Government Services Division is doing so well that it will be spun off in a special dividend to shareholders who own the stock today.Technically, indicators suggest PRGJ is ready for its next bounce:
- Break up above the 200-day MA
- Bullish MACD lines crossover
- Double bottom pattern shows possible appreciation
Fundamentals suggest extreme hidden value for the shares of PRGJ:
- Revenues last year expected to top $2 million
- Assets for more than $5.7 million
- Book value of equity exceeding $3.8 million
The Federal Government Contract includes providing key personnel for up to 50 positions such as application developers, network/system engineers and network analysts over the next twelve months. Value of the contract is estimated at $4 million dollars, suggesting PRGJ stock has the potential to be worth at least four times more than currently, with the other fundamentals and the industry ratios even more. But this could be just the beginning: PRG Government Services Division has been launched just a couple of months ago.
PRG opened recently also an office in London to target the emerging multi-billion European BPO market. That reveals even more tremendous potential after the largest US companies from the IT industy have already outsourced entire business units overseas. Moreover, PRGJ intends to acquire a running UK company, exact details are yet to follow.
Conclusion: In the short term: PRGJ is in an excellent position for a trade. Today is the cut-off date for being a shareholder to receive the special dividend. This should create a wave of buying that can easily take the stock up 30% or more. In the longer term: If they continue to secure contracts like the one last week, the stock can break through its old high of 4 cents and deliver a 300% gain or bigger.
PRG opened recently also an office in London to target the emerging multi-billion European BPO market. That reveals even more tremendous potential after the largest US companies from the IT industy have already outsourced entire business units overseas. Moreover, PRGJ intends to acquire a running UK company, exact details are yet to follow.
Conclusion: In the short term: PRGJ is in an excellent position for a trade. Today is the cut-off date for being a shareholder to receive the special dividend. This should create a wave of buying that can easily take the stock up 30% or more. In the longer term: If they continue to secure contracts like the one last week, the stock can break through its old high of 4 cents and deliver a 300% gain or bigger.
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