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Should Value Investors Buy Barrett Business Services (BBSI) Stock?

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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, 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 Barrett Business Services (BBSI - Free Report) . BBSI is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 13.98 right now. For comparison, its industry sports an average P/E of 22.31. Over the past 52 weeks, BBSI's Forward P/E has been as high as 19.73 and as low as 10.05, with a median of 14.05.

We should also highlight that BBSI has a P/B ratio of 4.71. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 7.82. Within the past 52 weeks, BBSI's P/B has been as high as 9.36 and as low as 3.45, with a median of 5.03.

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 0.6. This compares to its industry's average P/S of 1.19.

Finally, our model also underscores that BBSI has a P/CF ratio of 13.65. 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. This stock's P/CF looks attractive against its industry's average P/CF of 19.33. Over the past year, BBSI's P/CF has been as high as 22.59 and as low as 10.03, with a median of 14.38.

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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