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Is Kelly Services (KELYA) a Great Value Stock Right Now?

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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.

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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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 to watch right now is Kelly Services (KELYA - Free Report) . KELYA 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 8.96, which compares to its industry's average of 15.72. KELYA's Forward P/E has been as high as 12.99 and as low as 8.29, with a median of 10.60, all within the past year.

Investors should also note that KELYA holds a PEG ratio of 0.69. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. KELYA's industry currently sports an average PEG of 1.54. KELYA's PEG has been as high as 1 and as low as 0.69, with a median of 0.82, all within the past year.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. KELYA has a P/S ratio of 0.17. This compares to its industry's average P/S of 0.37.

Finally, we should also recognize that KELYA has a P/CF ratio of 8.07. 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 12.62. Over the past 52 weeks, KELYA's P/CF has been as high as 10.34 and as low as 6.32, with a median of 7.73.

Investors could also keep in mind Randstad Holding (RANJY - Free Report) , an Staffing Firms stock with a Zacks Rank of # 2 (Buy) and Value grade of A.

Randstad Holding sports a P/B ratio of 1.97 as well; this compares to its industry's price-to-book ratio of 2.14. In the past 52 weeks, RANJY's P/B has been as high as 2.29, as low as 1.82, with a median of 2.05.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Kelly Services and Randstad Holding are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, KELYA and RANJY feels like a great value stock at the moment.


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