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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, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 10.68. This compares to its industry's average Forward P/E of 21.05. BBSI's Forward P/E has been as high as 15.71 and as low as 5.28, with a median of 12.99, all within the past year.
BBSI is also sporting a PEG ratio of 0.89. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. BBSI's PEG compares to its industry's average PEG of 1.97. Over the past 52 weeks, BBSI's PEG has been as high as 1.25 and as low as 0.38, with a median of 1.01.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by 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 0.44. This compares to its industry's average P/S of 0.71.
Finally, investors should note that BBSI has a P/CF ratio of 8.15. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. BBSI's current P/CF looks attractive when compared to its industry's average P/CF of 10.12. Over the past year, BBSI's P/CF has been as high as 13.49 and as low as 4.30, with a median of 9.28.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Barrett Business Services is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, BBSI feels like a great value stock at the moment.
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Barrett Business Services, Inc. (BBSI) : Free Stock Analysis Report
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