Should Value Investors Buy These Business Services Stocks?
The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 company value investors might notice is DLH (DLHC). DLHC is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock is trading with a P/E ratio of 12.55, which compares to its industry's average of 13.49. DLHC's Forward P/E has been as high as 16.98 and as low as 11.11, with a median of 13.63, all within the past year.
Another notable valuation metric for DLHC is its P/B ratio of 2.89. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. DLHC's current P/B looks attractive when compared to its industry's average P/B of 3.36. Over the past 12 months, DLHC's P/B has been as high as 4.06 and as low as 2.09, with a median of 2.43.
Finally, investors will want to recognize that DLHC has a P/CF ratio of 9.65. 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. DLHC's P/CF compares to its industry's average P/CF of 22.49. Over the past 52 weeks, DLHC's P/CF has been as high as 15.21 and as low as 8.25, with a median of 9.44.
Randstad Holding (RANJY) may be another strong Staffing Firms stock to add to your shortlist. RANJY is a # 2 (Buy) stock with a Value grade of A.
Randstad Holding also has a P/B ratio of 2.46 compared to its industry's price-to-book ratio of 3.36. Over the past year, its P/B ratio has been as high as 2.86, as low as 2.09, with a median of 2.46.
These are just a handful of the figures considered in DLH and Randstad Holding'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 DLHC and RANJY is an impressive value stock right now.
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DLH Holdings Corp. (DLHC) : Free Stock Analysis Report
Randstad Holding NV (RANJY) : Free Stock Analysis Report
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