While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One stock to keep an eye on is Barrett Business Services (BBSI). BBSI is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 14.86. This compares to its industry's average Forward P/E of 22.57. Over the last 12 months, BBSI's Forward P/E has been as high as 16.43 and as low as 10.05, with a median of 13.85.
We should also highlight that BBSI has a P/B ratio of 4.73. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 7.86. BBSI's P/B has been as high as 6.59 and as low as 3.45, with a median of 4.72, over the past year.
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 0.68. This compares to its industry's average P/S of 1.01.
Finally, investors will want to recognize that BBSI has a P/CF ratio of 13.12. 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. This stock's P/CF looks attractive against its industry's average P/CF of 14.90. BBSI's P/CF has been as high as 17.69 and as low as 10.03, with a median of 12.73, all within the past year.
These are just a handful of the figures considered in Barrett Business Services's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that BBSI is an impressive value stock right now.
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Barrett Business Services, Inc. (BBSI) : Free Stock Analysis Report
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