Is Barrett Business Services (BBSI) a Great Value Stock Right Now?
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.
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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company value investors might notice is Barrett Business Services (BBSI). BBSI is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 14.29 right now. For comparison, its industry sports an average P/E of 21.90. BBSI's Forward P/E has been as high as 16.43 and as low as 10.05, with a median of 14.20, all within the past year.
Another notable valuation metric for BBSI is its P/B ratio of 4.68. 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. BBSI's current P/B looks attractive when compared to its industry's average P/B of 7.72. Over the past 12 months, BBSI's P/B has been as high as 5.64 and as low as 3.45, with a median of 4.71.
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. BBSI has a P/S ratio of 0.76. This compares to its industry's average P/S of 0.98.
Finally, investors should note that BBSI has a P/CF ratio of 12.89. 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. This stock's P/CF looks attractive against its industry's average P/CF of 14.25. Over the past year, BBSI's P/CF has been as high as 15.66 and as low as 10.03, with a median of 12.77.
These are only a few of the key metrics included in Barrett Business Services's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, BBSI looks like an impressive value stock at the moment.
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