BBSI is growing like a weed, as they are offering something to employers in California or elsewhere that has considerable value. Workers comp is just one piece of BBSI's service proposition. Plus, if you read through BBSI's SEC filings, you will see that BBSI has been reserving more aggressively recently than it ever has in the past. As Elich said on the call Wednesday, "I would say in the last year we have made as much or more progress in the area of workers comp that we maybe had in the previous 25 years that we've been doing what we've been doing."
So, based on BBSI's Q4 guidance, BBSI will earn $2.82 - $2.87 in 2013 - let's take the high end of BBSI's Q4 EPS $1.15-1.20 guidance, which makes BBSI's 2013 EPS $2.87.
I think Mr. Elich effectively guided to at least 30% revenue growth next year. Let's assume 30%. Assuming margins stay the same, that takes BBSI's $2.87 to $3.73. But then Mr. Elich suggested a further 10 basis point increase in operating margins during the conference call. BBSI's operating margin is going to end this year at roughly 1.0%. So an increase of 10 basis points (i.e., taking the 1.0% operating margin to a 1.1% operating margin), increases EPS by another 10% (assuming the same non-operating income/expenses, tax rates and share count).
That brings BBSI's 2014 EPS to $4.10, if my math is correct.
In other words, at $82.00 a share, that suggests BBSI is 20x next year's earnings. Interesting...
I am sorry. I got a little excited, and shouldn't have written my sarcastic comment. I always figure, one should never type anything that one wouldn't say out loud to someone's face. I violated my own rule. I apologize.