Is Barrett Business Services (BBSI) a Great Value Stock Right Now?
Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company to watch right now is Barrett Business Services (BBSI). BBSI is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 14.18. This compares to its industry's average Forward P/E of 19.40. Over the past year, BBSI's Forward P/E has been as high as 14.60 and as low as 10.64, with a median of 12.79.
Investors should also note that BBSI holds a PEG ratio of 1.01. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. BBSI's industry has an average PEG of 1.82 right now. Over the past 52 weeks, BBSI's PEG has been as high as 1.04 and as low as 0.76, with a median of 0.91.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. BBSI has a P/S ratio of 0.67. This compares to its industry's average P/S of 0.73.
Finally, investors will want to recognize that BBSI has a P/CF ratio of 13.45. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. BBSI's P/CF compares to its industry's average P/CF of 15.59. Over the past 52 weeks, BBSI's P/CF has been as high as 13.82 and as low as 10.11, with a median of 11.81.
If you're looking for another solid Outsourcing value stock, take a look at Brink's (BCO). BCO is a # 2 (Buy) stock with a Value score of A.
Brink's sports a P/B ratio of 6.18 as well; this compares to its industry's price-to-book ratio of 13.19. In the past 52 weeks, BCO's P/B has been as high as 8.86, as low as 4.38, with a median of 5.24.
These are only a few of the key metrics included in Barrett Business Services and Brink's strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, BBSI and BCO look like an impressive value stock at the moment.
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Barrett Business Services, Inc. (BBSI) : Free Stock Analysis Report
Brink's Company (The) (BCO) : Free Stock Analysis Report
