Should Value Investors Buy Barrett Business Services (BBSI) Stock?
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.
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 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 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 is trading with a P/E ratio of 13.08, which compares to its industry's average of 22.81. Over the last 12 months, BBSI's Forward P/E has been as high as 15.12 and as low as -150.87, with a median of 12.59.
BBSI is also sporting a PEG ratio of 0.93. 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 2.15 right now. Over the last 12 months, BBSI's PEG has been as high as 1.26 and as low as -12.57, with a median of 0.92.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. BBSI has a P/S ratio of 0.62. This compares to its industry's average P/S of 0.79.
Finally, investors will want to recognize that BBSI has a P/CF ratio of 12.86. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 16.11. Within the past 12 months, BBSI's P/CF has been as high as 13.58 and as low as 10.22, with a median of 11.57.
Another great Outsourcing stock you could consider is Cap Gemini (CGEMY), which is a # 2 (Buy) stock with a Value Score of A.
Cap Gemini is currently trading with a Forward P/E ratio of 15.01 while its PEG ratio sits at 1.20. Both of the company's metrics compare favorably to its industry's average P/E of 22.81 and average PEG ratio of 2.15.
Over the last 12 months, CGEMY's P/E has been as high as 21.31, as low as 13.47, with a median of 17.03, and its PEG ratio has been as high as 1.77, as low as 1.12, with a median of 1.36.
Cap Gemini sports a P/B ratio of 2.84 as well; this compares to its industry's price-to-book ratio of 14.93. In the past 52 weeks, CGEMY's P/B has been as high as 5.12, as low as 2.56, with a median of 3.22.
These are only a few of the key metrics included in Barrett Business Services and Cap Gemini 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 CGEMY look like an impressive value stock at the moment.
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Barrett Business Services, Inc. (BBSI) : Free Stock Analysis Report
Cap Gemini SA (CGEMY) : Free Stock Analysis Report
