Are Investors Undervaluing Barrett Business Services (BBSI) Right Now?
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.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest 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 is trading with P/E ratio of 14.84 right now. For comparison, its industry sports an average P/E of 21.21. BBSI's Forward P/E has been as high as 19.73 and as low as 10.05, with a median of 14.79, all within the past year.
We should also highlight that BBSI has a P/B ratio of 4.98. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 7.49. BBSI's P/B has been as high as 9.36 and as low as 3.45, with a median of 6.09, 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 0.63. This compares to its industry's average P/S of 0.82.
Finally, our model also underscores that BBSI has a P/CF ratio of 14.49. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. BBSI's current P/CF looks attractive when compared to its industry's average P/CF of 20.10. Over the past 52 weeks, BBSI's P/CF has been as high as 22.59 and as low as 10.03, with a median of 16.34.
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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