Seeking Alpha: ARC Document Solutions' Recovery Still Off Most Investors' Radar

ARC Document Solutions (NYSE:ARC) is still an unknown name to a large swath of Wall Street. Two sell-side analysts cover the stock and there has been no coverage on Seeking Alpha since my piece a year ago. During that year, though, these shares have climbed about 20% as the company has continued to make progress in transitioning from a heavy reliance on architecture/engineering/construction (or AEC)-based reprographics toward managed print services, color printing, and digital archiving.

I've been impressed with what I've seen in terms of the company's ability to offer an expanded array of services to its traditional customer base while also trying to expand beyond its roots in the AEC sector. I believe ARC is still poised to benefit from a recovering AEC sector and success in expanding outside of the AEC sector would offer some upside. I think the shares are undervalued below $10 but a disappointing fourth quarter did cost the company some credibility and management needs to rebuild confidence in the prospects for consistent high single-digit/low double-digit EBITDA growth.

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ARC Document Solutions' Recovery Still Off Most Investors' Radar

Cintas Not Scintillating

These are lousy times to be in the business of providing services to business. Whether you look at payroll and HR service companies like Paychex (Nasdaq:PAYX) and ADP (NYSE:ADP), staffing companies like Manpower (NYSE:MAN), or sanitation service providers like Ecolab (NYSE:ECL), the combination of stagnant employment and cost-cutting has been a headache for almost every player. As the leader provider of uniform rentals in North America, Cintas (Nasdaq:CTAS) is likewise caught up in that malaise. 

The Quarter That Was
All things considered, Cintas likely made the best of a difficult situation in the company's fiscal first quarter. Overall revenue growth exceeded 3%, with organic revenue growth of just under that figure. Although core uniform rental revenue was barely positive, at least it was positive, unlike the negative organic revenue performance in the prior quarter. On the other hand, the company did see solid double-digit growth in both uniform sales and document management.

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