|Written by GSCR Staff|
|Friday, 14 December 2012 10:02|
It seems many firms are handing out gifts this holiday season to avoid the Grinch tax man in Washington. Chasing the special dividend may not be a great investment strategy, but ideal for the purposes of our daily blog, which is to provide our subscribers with ideas on making some money in a short time by taking advantage of this ‘trading’ market.
RCM Technologies, Inc. (NASDAQ – RCMT - $6.43) is a stock in our small cap universe that has entered the special dividend game. On December 4th they announced a $1 per share special dividend made payable on December 27th, for all shareholders of record at the close of business on December 20th. Is this a ploy to drive the share price up? Sure it is, but $1 is a fairly substantial dividend for stock in this market cap space. The Street likes this play also, as the price has increased steadily from its $5.71 closing price on December 4th.
The Company, based in New Jersey, was founded in 1971 and has approximately 1,600 employees. The firm is a business and technology solution provider and has government and commercial clients in the US, Canada, and Puerto Rico in three main business segments: Information Technology, Engineering, and Specialty Health Care Services. The client base ranges from aerospace/defense, energy, financial services, life sciences, manufacturing and distribution, in the public and private sectors. The Specialty Health Care Services is a unique segment that provides short term staffing, conducts executive searches, and other placement services in all aspects of the health care industry.
RCM realized an increase of $1.1 million in revenue from 3Q11 to 3Q12 and completed a sizable stock buyback program of about 815,000 shares at an average price of $5.43. Considering that the stock trades less than 15,000 per day is evidence that clearly management is to reduce the share count and build shareholder value.
We say take the money and run on this one!
Disclosure: Goldman Small Cap Research analysts are neither long nor short these shares but may elect to purchase the stock within the next 48 hours.
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