]> SA Advisory : Research Report


The number of temporary workers in the U.S. has nearly doubled over the past five years from 1.2 million to more than 2 million -- a record of job creation that beats just about every other industry in the country.

The growth and increasing sophistication of the temporary employment industry is creating a national trading floor for talent. Temporary workers now account for about 5% of the U.S. labor force, according to a 1995 Labor Department survey. The economic consequences of this phenomenon is a more flexible and efficient job market.

It's true that most of the millions of people currently temping around the land are still filling low-wage clerical, secretarial, and light industrial blue-collar positions. But some of the fastest growing segments of the temp job market are in the professional and technical fields. These high-skilled areas already make up about 20% of the total temp payroll. In an ever widening range of professions, graphic design, medicine, law, engineering, computer, software and management, upmarket temps are migrating from project to project and using temporary agencies to handle the business side of their careers. Employers are also using temporary employment to audition possible full-time hires.

Recent research by the Federal Reserve Bank of Chicago shows that white-collar temps actually earn slightly more than their permanent counterparts.

At present there are currently between 5,000 to 6,000 temporary companies in the U.S., according to NATSS; ten years ago there were half as many. It is obvious that over the next ten years you should see good growth in the market for high-skilled temps, as companies become more aware of its usefulness. Employees should play down the notion of lifetime employment. "Today, no one is going to take care of you, but yourself."

It is obvious that consolidation by acquisition will most definitely reduce the amount of temp companies. Most temp companies have instituted an active acquisition program in order to grab some of the expanding external market growth. Of course, AMGC is pursuing this avenue in addition to its internal growth. We have not included nor taken in account any acquisitions that may be consummated during the next few years in our fundamental analysis. Revenue and earnings estimates may actually be on the low side.

(Some might conclude that S.A. Advisory is too strict when analyzing AMGC with respect to its fundamentals. We, of course, disagree. All companies, whether large or small, must earn our respect. We sugarcoat little and sour at corporate imperfections. Small does not warrant second-tier evaluation. The company must stand up with the largest in order to be counted.)


When you consider the overall staffing industry growth rate with respect to revenue and earnings, AMGC is well positioned to either growth internally or via acquisition. The company also could be gobbled up by an even larger fish. Investors should not discount that scenario.

Top management is well seasoned in the staffing industry with over 38 years of experience.

Fundamentally speaking, AMGC appears high undervalued based upon revenue and earnings estimates for fiscal 96 and 97 and should and could easily trade at twice its price near term.

Aggressive investors looking to diversify into the staffing industry should consider AMGC for their diverse portfolio. Those investors that are less gun-ho should consider a split position of AMGC and one of the other staffing companies mention in this report (All companies mentioned in Chart AA are rated BUYS by major brokerage firms).


Geared toward "risk tolerant investor" who have a "job". Dramatic growth potential during the next 6 - 24 months appears likely.

AMGC is considered "highly" speculative and only risk tolerant investors should consider investing in unseasoned micro-mini caps.

S.A. Advisory, an advisory firm, acts as a consultant to AMGC. We receive compensation for production of this anecdotal research report.
We may buy and/or sell shares in this issue at our own discretion.
HOTLINE 1-900-990-0909, EXT 192 ($2.00/min).

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