Back to top

Image: Bigstock

JOB vs. NSP: Which Stock Should Value Investors Buy Now?

Read MoreHide Full Article

Investors looking for stocks in the Staffing Firms sector might want to consider either GEE Group Inc. (JOB - Free Report) or Insperity, Inc. (NSP - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Right now, GEE Group Inc. is sporting a Zacks Rank of #2 (Buy), while Insperity, Inc. has a Zacks Rank of #5 (Strong Sell). Investors should feel comfortable knowing that JOB likely has seen a stronger improvement to its earnings outlook than NSP has recently. But this is only part of the picture for value investors.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.

The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

JOB currently has a forward P/E ratio of 9.33, while NSP has a forward P/E of 22.59. We also note that JOB has a PEG ratio of 0.62. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. NSP currently has a PEG ratio of 1.51.

Another notable valuation metric for JOB is its P/B ratio of 0.65. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, NSP has a P/B of 120.03.

These metrics, and several others, help JOB earn a Value grade of A, while NSP has been given a Value grade of C.

JOB is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that JOB is likely the superior value option right now.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Insperity, Inc. (NSP) - free report >>

GEE Group Inc. (JOB) - free report >>

Published in