Small Cap Report - STAF, NPT

Good morning! Here is my usual trawl through the morning's RNSs, looking for the undervalued and overlooked.

Staffline (LON:STAF)

Recruitment/outsourcing group Staffline (STAF) has issued a short & sweet trading statement, saying that 2012 earnings will be in line with market expectations. They reiterate they are, "well placed to continue to capitalise on a number of strategic opportunities that exist across our business", the biggest one of which is the  Govt's welfare to work programme (which could become pretty lucrative for STAF in the next 5 years).

Morningstar shows the broker consensus EPS as 33.6p for 2012, so that puts STAF on a fairly cheap PER of 8.9 times 2012 earnings. There is also a 8.3p forecast divi, giving a yield of 2.8%. So it's no longer amazing value, but certainly good value. However, if EPS grows as forecast to 40p (with a 9.5p divi) then the 2013 forecast PER falls to 7.5, and the yield rises to 3.2%, which is looking a lot more interesting.

STAF has been heavily tipped by the Mail on Sunday, so I suspect that pulled in a lot of the recent buyers, so personally I shall sit this one out, and look to buy back in any significant pullback to say the 260-270p area.

On 4 Sep 2012 I published a report here following a private client broker lunch I attended with Staffline's Directors, and was very impressed. I bought shares at 226p, although have recently sold them at c.300p, in order to recycle the money into something that hasn't yet moved up (Vianet), but looks like it will once the overhang from a large seller is cleared.

Incidentally, I also made Staffline the "share of the month" for Sep 2012 on my sister site, Small Cap Value, which I'm pleased to say is now up & running again after some major IT problems (had to recreate the website from scratch, but have installed proper automatic backups now, so should be fine in future).

NetPlay TV (LON:NPT)

Netplay TV (NPT), the interactive gaming company, puts out a strong Q4 & full year trading statement, indicating that they are confident of exceeding full year market expectations. So that means they should deliver over 1p EPS for 2012, therefore these look potentially good value at 12.2p.

They note that mobile/tablet is a strong area of growth (isn't it everywhere?!).
I'm not terribly keen on gaming companies, as they are essentially preying on people with addictive personalities, so it's not for me. But purely based on the numbers it looks like a potentially interesting growth company.

OK, that's it for today. Not much else to report, other than that my training runs for the Brighton Half Marathon on 17 Feb are going well - am going out 3 or 4 times per week now, and managed about 5 miles last night with relative ease. Thank you to everyone who has sponsored me for either MacMillan cancer care, or the Sussex Beacon charities. The Justgiving link is here if you wish to donate. I'm at 59% of target funds raised so far ...

Also, I'm doing the DryAthlon for Cancer Research, which is to renounce alcohol for the whole of January. People who know me acknowledge that I (harrumph, coughs!) enjoy a drink occasionally, but so far so good. If you fancy sending me a virtual diet coke (for the benefit of Cancer Research), then please click on this different Justgiving link. Thank you to "Ajay" who kindly donated £20, much appreciated!

Have a good week!

Regards, Paul.