babysamalot

I told you so...

Time to reload on SRT shares. Analysis summary attached. Please view full report here: http://omarsamalotanalysis.com/reports.html. STARTEK_AnalysisSummary_Q4Dec2016_March2017.pdf

Analysis summary attached. Please view full report here: http://omarsamalotanalysis.com/reports.html. StarTeK_AnalysisSummaryt_Q3Sep2016_Dec2016.pdf

oh yeah, they are cooking on gas. I think we will be extremely pleased with new business wins and new client wins during Q3. More recent announcements below: http://www.startek.com/news/startek-inc.-recruiting-to-fill-420-jobs-in-colorado-springs http://www.startek.com/news/startek-inc.-recruiting-to-fill-70-full-time-jobs-in-jeffersonville http://www.startek.com/news/startek-inc.-recruiting-to-fill-200-jobs-in-greeley-colorado they are filling up capacity fairly quickly in both the US and the Philippines including healthcare, retail, and e-commerce business. I strongly believe sustainable profitability is upon us. With their strongest quarters about to be released, I will be very surprised if we haven't hit $10/share soon after Q4 is out in mid February.

thanks for that. I believe once Q3 is out and knowing Q4 is the highest volume/profitability quarter and Q1 can be the second highest, Baird will have no choice but to upgrade the stock. I have to agree with you on Lake Street....if these analysts are not spoon fed with guidance, they are totally lost as they have no motivation to put in the work. I have found management to be very accessible to potential investors. And, for those of you on the west coast, StarTek will participate in the Liolios investor conference on Sept 7 and 8 at the Four Seasons in San Francisco....bombard them with questions! I will be glad to answer calls/emails. thanks.

In case anyone is still interested, Q2'16 analysis summary attached. Full report can be downloaded here: omarsamalotanalysis.com I expect big numbers for Q3 onwards with announcements of huge business wins. StarTeK_ExecutiveSummary_Q2June2016.pdf

Startek's progress has gone unnoticed. One street analyst more than tripled his 2016 estimates, the other more than doubled them....yet both analysts left their ratings and price targets unchanged. Inexplicable. It is only a matter of time before the story gets discovered. Analysis summary attached. Full report can be downloaded here: omarsamalotanalysis.com StarTeK_AnalysisSummary_2016Q1_May2016.pdf

1) Mr. Carlson (CEO) guided to double digit revenue growth from FYE2015 levels. He did not strip out Accent related revenue to qualify that growth expectation. So, in my analysis, I estimate an 18% revenue growth in 2016 over 2015. In trying to explain the probability of achieving that growth rate, I pointed out that Accent revenue alone over 2014 levels represent 12% growth; so I'm only really assuming a 6% to 7% organic growth from the revenue level reached in 2014. Maybe that wasn't clear in my write-up. $334m - $67m (Accent) = $267m which is 6.8% growth over the $250m achieved in 2014. $250m + $67m (Accent) = $317m which is 12% growth over the $282m achieved in 2015. So what I'm saying is: take 2014 as a base, subtract/add business lost/won during 2015, plus/minus any business won/lost during 2016....I assume the results of that is only about a 6% to 7% growth....then we add the revenue acquired with Accent. hopefully I'm not making this more confusing than it needs to be. For 2017, I do believe they can achieve double digit revenue growth as well, but I prefer to err on the side of caution to demonstrate that even with a single digit growth rate, the current stock price is grossly undervaluing the Company. 2) We immediately saw the effect in a much lower SG&A expense level as the cost of implementation has been eliminated. The faster speed to ramp with lower cost will show itself with a higher, more stable gross margin base (ramping expense will have a lower impact) and revenue from new business wins announced will show up within 1 to 2 quarters. Now, if they are doing their job and growing, we should always see some growth investment expenses...however, their impact on the results will be much less noticeable than before given their scale and cost structure now.

All good questions. Yes, the seat reduction from last Q was the KC closure. The 600 seat reduction later in the year is them trying to optimize their footprint in the Philippines....meaning they are trying to sublease some of the space ("taking out pockets of capacity") to increase utilization rates and margins. The 600 number is an estimate since I don't know exactly how many will be offloaded. No site closures are planned so far. This is a key step to improve Offshore margins to normalized levels and reach the targeted 10% EBITDA margin. The lower revenue estimate for 2016 is me tweaking and trying to be more conservative; I want to be close in forecasting their results but I prefer they beat my numbers. The last time they had back to back quarters with EPS gains was in 2009....I think there is a high probability we will see another gain in Q1 reconfirming and strengthening the view that this turnaround is complete and growth in both revenue and earnings have resumed.

please find report attached. I would seriously consider the current price as a great window to load up after the great quarter released and what is expected going forward. StarTeK_AnalysisReport_Q4Dec2015_March2016.pdf

yeah I'm still in that process so I will answer with more conviction once I'm done. But yes, some seasonal programs do end before Q1 ends....however, they have shown Q1 revenue almost unchanged from Q4 in the past. It all depends if new NON-SEASONAL business was also ramped during Q4 as well; which I think may be the case. And they did beat my Q4 revenue forecast by $4m, so if it came at the expense of $2 to $4 million from Q1, we are still in the ballpark. regardless, we should still see healthy EBITDA levels as they continue to cut costs (lowering their break-even point) as the Accent acquisition delivers their full profitability expectation during Q1. the market is giving us a great window to continue to accumulate shares, in my opinion.

thanks for the kind words. I still have to talk to management first before fine tuning my 2016 forecast, but my expectation is still as I saw it before. I would still expect slight profitability in Q1 and Q2, a return to FCF positive during Q2 with beginning to pay down debt then, and just monster quarters in Q3 and Q4. As long as the market (and "analysts") continue to be unbelievers, the company will beat estimates handily.....which is my preferred situation. To me, Q4 results confirmed the following: 1) Lower ultimate debt balance needed 2) FCF positive and debt repayment to start in Q2 3) Laser focus on showing sustained profitability 4) successful IT Platform implementation allowing them to ramp business rapidly and effectively I would expect another nice eps estimate beat for Q1'16 (earnings released in early May); after that, "analysts" will have to raise their EBITDA estimates and join the believers club....better late than never, I always say.

given that management has said that the Accent acquisition has been performing at or above expectations and that cost synergies are ahead of schedule, I see the Sprint call center layoffs announcement as a potential positive. It seems Startek has positioned itself well to grab more business from Sprint; so, given that these layoffs are from Sprint's in-house centers, this poses an opportunity for their current vendors like Startek.

well lets look at the concerns. Effect of China or other emerging market slowdown: None. Revenue is almost entirely US domestic. Potential US economy recession: Marginal. Lower economic activity would effect overall volumes only on a marginal basis; meaning, it would probably affect a company more if their capacity were fully utilized. In Startek's case, yes there could be a marginal effect from existing lines of business, but that would be mitigated by increasing their client diversity and wining new business. Also, the clients they serve are mostly in the telecom, cable, healthcare, insurance and financial sectors that are considered defensive or consumer staples. They do have a small exposure to online retail. As potential clients look to lower their own customer service costs, they will look to BPO companies like SRT to outsource that activity; so in some cases, an economic slowdown could actually bring new business.

you are welcomed. to answer your last question about Arnaud Adjler, he accumulated a 7% position in the company and successfully sought a board seat in last year's shareholder meeting. based on his past activism (and pretty successful track record), his goal is to get the company sold. Startek's size and BPO industry's fragmentation calls for a sale of the company. the question is when....my opinion is that pressure to sell will come as soon as they get close to their targeted EBITDA margin levels. I believe there will be both private and public suitors once they stabilize their performance and show sustainable profitability. Privet actually has 2 board seats and they are backed by the founder of the company who still owns about 22%. They have been very opportunistic in accumulating shares....we shall soon find out if they have continued to increase their stake once 13Ds start to come out over the next few weeks.