Reliable temporary help is essential to firms subject to seasonal variations or unexpected bursts of activity. A major source for assistance along that line in headquartered in Tacoma, Washington.

Labor Ready (NYSE: LRW) provides temporary employees for manual labor, light industrial, and skilled construction trades. The firm serves some 300,000 small and mid-sized businesses in the construction, warehousing, hospitality, landscaping, transportation, light manufacturing, retail, wholesale, facilities and sanitation industries. Labor Ready operates through 932 branches in the United States, Canada, Puerto Rico, and the United Kingdom.

The company surprised the Street last week, when it reported Q2 EPS of 41 cents and revenues of $351.1 million. Analysts had been looking for 35 cents and $340.7 million. Management also guided Q3 EPS to 48-50 cents (49 cent consensus), Q3 revenues to $390-$395 million ($384.27M consensus), FY07 EPS to $1.45-$1.48 ($1.39 consensus) and FY07 revenues to $1.39-$1.40 billion ($1.37B consensus). The stock popped on the news and has now entered the initial stage of a bullish "pennant" consolidation pattern. Prices frequently exit pennants moving in the same direction they were traveling when they entered them. In this case, that would be to the upside.

Brokers recommend the stock with one "strong buy," one "buy," six "holds" and two "sells." Analysts see a 16% average annual growth rate, through the next five years. The LRW P/E ratio (18.43), PEG ratio (1.18), Price to Sales ratio (0.93), Price to Book ratio (4.34), Price to Cash Flow ratio (14.46), Price to Free Cash Flow ratio (14.40), Return on Assets (13.33%), Return on Investment (16.29%) and Return on Equity (22.97%) compare favorably with industry, sector and S&P 500 averages.

Institutional investors hold about 95% of the outstanding shares. The stock is one of those used to calculate the S&P 600 SmallCap Index. Over the past 52 weeks, it has traded between $15.45 and $28.63. A stop-loss of $23.40 looks good here.

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com.