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Should Value Investors Buy BG Staffing (BGSF) Stock?

Zacks Equity Research

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One company value investors might notice is BG Staffing (BGSF). BGSF is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock has a Forward P/E ratio of 8.65. This compares to its industry's average Forward P/E of 13.99. Over the past year, BGSF's Forward P/E has been as high as 16.69 and as low as 4.33, with a median of 12.89.

Another valuation metric that we should highlight is BGSF's P/B ratio of 1.57. 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 1.74. Over the past year, BGSF's P/B has been as high as 3.36 and as low as 0.94, with a median of 1.95.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. BGSF has a P/S ratio of 0.33. This compares to its industry's average P/S of 0.38.

These figures are just a handful of the metrics value investors tend to look at, but they help show that BG Staffing is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, BGSF feels like a great value stock at the moment.


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