SOURCE: Goldman Small Cap Research, Inc.

September 23, 2013 08:15 ET

Goldman Small Cap Research Initiates Research Coverage of Sterling Consolidated Corp.

BALTIMORE, MD--(Marketwired - Sep 23, 2013) - Goldman Small Cap Research, a stock market research firm focused on the small cap and microcap sectors, has initiated research coverage of Sterling Consolidated Corp. (OTCQB: STCC). Through its wholly-owned subsidiary Sterling Seal and Supply, the Company has been a leading supplier of hydraulic and pneumatic seals to the automotive and industrial marketplace for more than 40 years. Operating in a multi-billion market, Sterling Seal and Supply is a top-10 independent supplier of O-rings.

Sterling boasts 3,000 customers across the country along with its three regional distribution centers on the East Coast. The Company's seal products, particularly the O-rings, are ubiquitous and renewed growth in key industries, such as energy, is driving sales. End users of Sterling's products include some of the largest firms in the world. Sterling has implemented a roll-up acquisition strategy with funding in place to acquire other firms in the highly fragmented, multi-billion dollar seal market, at favorable private market valuations. Typical M&A targets generate up to $5M in annual revenue with 8-10% net margins and may sell for 3-5x EBITDA.

In the Goldman Opportunity Research report on the Company, analyst Rob Goldman outlines his investment thesis.

"Management has elected to engage its M&A initiative to take advantage of a number of opportunities in which the market has presented. By executing this strategy, Sterling can generate meaningful economies of scale, efficient distribution and freight forwarding, and greater operating margins. The Company is currently in advanced negotiations with over 10 acquisition targets. All of these prospects have a history of consistent results, including solid net margins."

"Clearly, Sterling is using its public company status to successfully complete its M&A objectives as it can leverage the arbitrage between low private market valuations of 3-5x EBITDA and enjoy substantially higher public market valuations. If all of Sterling's M&A targets are acquired, the annual revenue run-rate would quadruple its current annual sales. Therefore, we believe that STCC is set to reap big profits and enjoy a huge increase in valuation on its way to a future up-listing to more senior exchange."

To view our sponsored Sterling report, disclosures and disclaimers, or to download the report in its entirety, please visit www.goldmanresearch.com.

About Goldman Small Cap Research: Led by former Piper Jaffray analyst and mutual fund manager Rob Goldman, Goldman Small Cap Research produces sponsored and non-sponsored small cap and micro cap stock research reports, articles, daily stock market blogs, and popular investment newsletters. Goldman Small Cap Research is not in any way affiliated with Goldman Sachs & Co.

A Goldman Small Cap Research report, update, newsletter, or article is not intended as an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed. Please read all associated full disclosures, disclaimers, and analyst background on our website before investing. Neither Goldman Small Cap Research nor its parent is a registered investment adviser or broker-dealer with FINRA or any other agency. To download our research, view our disclosures, or for more information, visit www.goldmanresearch.com.

About Sterling Consolidated Corp.: Sterling Consolidated Corp. (OTCQB: STCC) through its wholly-owned subsidiary, Sterling Seal and Supply has been a leading supplier of hydraulic and pneumatic seals to the automotive and industrial marketplace for more than 40 years. Through a combination of leveraging its logistical expertise and sophisticated, experienced management, the company intends to be an active and strategic consolidator of small- and mid-sized businesses within the highly-fragmented, multi-billion dollar seal industry. Currently serving more than 3,000 customers, Sterling offers acquisition targets a unique growth opportunity and competitive advantage through logistical expertise, strong regional branding and industry-specific distribution centers.

For more information, visit www.sterlingconsolidated.com.

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