PRGJ - Undervalued

Back in 2007 and early 2008 PRGJ was an actively traded stock fetching in excess of $.20 a share. Today it trades for $.019 a share a severe discount to what the market was willing to pay back in 2007/2008. The stock price peaked right around the time the stock market peaked, and it continued to fall even as the markets and economy recovered. The stock bottomed earlier this year and has started a modest trend higher. I think this trend could turn out into an outright rally for PRGJ shares with recent Pink Sheet filings indicating the stock, in my view, should be trading much higher than it currently is.

PRG Group provides business process consulting, technical support, project management, network integration services, voice and data managed services, network optimization and IT outsourcing. They also boast key relationships with some of the biggest companies in the world including IBM, Microsoft and Cisco.

Just from reading through their filings and corporate web site you get the impression that this isn't your average Pink Sheet stock. The company provides provides innovative consulting, technology, and outsourcing services. They deliver solutions that leverage the process knowledge of our consultants. Our services are broad based and include business process improvement, analytical services, VoIP/ERP/CRM implementations, global roll-outs, upgrades, testing, as well as application management, and infrastructure support.

Their services earned them over $4 million in revenue last year, while posting a gross profit of $1.3 million. Their assets are more than double their liabilities giving investors tangible value for their shares. Speaking of shares the company also released their share structure:


Just from looking at the chart and the above share information you can tell this stock has a modest float, one that could be easily accumulated. I think once investors see the value in these shares accumulation will occur and the price per share will be much higher than it does today.

According to the recent balance sheet filing on Pink Sheets shares of PRGJ valued solely on its assets are worth almost $.02 a share and that is after you subtract the company's liabilities. What does that mean? It means in the event the company decided to liquidate shareholders would get close to $.02 a share.

I think that sets the floor for this stock at $.02, factor in the $4 million in revenues and $1.3 million in gross profits and you have a stock that should be trading much higher than it is. This stock is a value play, a stock that has been largely ignored by the investing public for the last few years.

With the recent filings on Pink Sheets, the first filings by the company in almost 3 years, it is evident to me that management is becoming transparent. The financials are a great first step and have revealed the strength of PRGJ and I think there could be more press, filings coming in the weeks and months ahead. It is my belief that they wouldn't have issued the filings on Pink Sheets if they weren't turning a brand new page with shareholders and investors, which to me is the beginning of good things for this stock.