We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Should Value Investors Pick On Assignment, Inc. (ASGN)?
Read MoreHide Full Article
Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put On Assignment, Inc. (ASGN - Free Report) stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:
PE Ratio
A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.
On this front, On Assignment has a trailing twelve months PE ratio of 18.81, as you can see in the chart below:
This level actually compares favorably with the market at large, as the PE for the S&P 500 stands at about 20.32. If we focus on the long-term PE trend, On Assignment’s current PE level puts it slightly below its midpoint over the past five years.
Further, the stock’s PE also compares favorably with the Zacks classified Business Service sector’s trailing twelve months PE ratio, which stands at 23.05. At the very least, this indicates that the stock is relatively undervalued right now, compared to its peers.
We should also point out that On Assignment has a forward PE ratio (price relative to this year’s earnings) of just 16.30, so it is fair to say that a slightly more value-oriented path may be ahead for the stock in the near term too.
P/S Ratio
Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.
Right now, On Assignment has a P/S ratio of about 1.04. This is lower than the S&P 500 average, which comes in at 3.13 right now. Also, as we can see in the chart below, this is around the highs for this stock in particular over the past few years.
Broad Value Outlook
In aggregate, On Assignment currently has a Zacks Value Style Score of ‘B’, putting it into the top 40% of all stocks we cover from this look. This makes On Assignment a solid choice for value investors, and some of its other key metrics make this pretty clear too.
What About the Stock Overall?
Though On Assignment might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth grade of ‘B’ and a Momentum score of ‘B’. This gives ASGN a Zacks VGM score—or its overarching fundamental grade—of ‘A’. (You can read more about the Zacks Style Scores here >>)
Meanwhile, the company’s recent earnings estimates have been mixed at best. The current quarter has seen one upward estimate revision in the past sixty days compared to four downward, while the full year estimate has seen three upward and two downward revisions in the same time frame.
As a result, the current quarter consensus estimate has dropped by 3.4% in the past two months, while the full year estimate has inched higher by 1.0%. You can see the consensus estimate trend and recent price action for the stock in the chart below:
This somewhat mixed trend is why the stock has just a Zacks Rank #3 (Hold) and why we are looking for in-line performance from the company in the near term.
Bottom Line
On Assignment is an inspired choice for value investors, as it is hard to beat its good lineup of statistics on this front along with a good industry rank (Top 28% out of more than 250 industries). In fact, over the past six months, the Zacks Staffing industry has clearly outperformed the broader market, as you can see below:
Notably, the stock has a long term expected earnings growth of 14% and sports a Zacks Rank #3. These mixed expectations indicate that while the stock’s growth story might be good over the long term, analysts have some apprehensions about the stock in the immediate future. So, value investors might want to wait for analyst sentiment to turn around in this name first, but once that happens, this stock could be a compelling pick.
The Best Place to Start Your Stock Search
Today, you are invited to download the full list of 220 Zacks Rank #1 "Strong Buy" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 "Strong Sells" and other private research. See these stocks free >>
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Should Value Investors Pick On Assignment, Inc. (ASGN)?
Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
.jpg)
.jpg)
.jpg)
.jpg)
One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put On Assignment, Inc. (ASGN - Free Report) stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:
PE Ratio
A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.
On this front, On Assignment has a trailing twelve months PE ratio of 18.81, as you can see in the chart below:
This level actually compares favorably with the market at large, as the PE for the S&P 500 stands at about 20.32. If we focus on the long-term PE trend, On Assignment’s current PE level puts it slightly below its midpoint over the past five years.
Further, the stock’s PE also compares favorably with the Zacks classified Business Service sector’s trailing twelve months PE ratio, which stands at 23.05. At the very least, this indicates that the stock is relatively undervalued right now, compared to its peers.
We should also point out that On Assignment has a forward PE ratio (price relative to this year’s earnings) of just 16.30, so it is fair to say that a slightly more value-oriented path may be ahead for the stock in the near term too.
P/S Ratio
Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.
Right now, On Assignment has a P/S ratio of about 1.04. This is lower than the S&P 500 average, which comes in at 3.13 right now. Also, as we can see in the chart below, this is around the highs for this stock in particular over the past few years.
Broad Value Outlook
In aggregate, On Assignment currently has a Zacks Value Style Score of ‘B’, putting it into the top 40% of all stocks we cover from this look. This makes On Assignment a solid choice for value investors, and some of its other key metrics make this pretty clear too.
What About the Stock Overall?
Though On Assignment might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth grade of ‘B’ and a Momentum score of ‘B’. This gives ASGN a Zacks VGM score—or its overarching fundamental grade—of ‘A’. (You can read more about the Zacks Style Scores here >>)
Meanwhile, the company’s recent earnings estimates have been mixed at best. The current quarter has seen one upward estimate revision in the past sixty days compared to four downward, while the full year estimate has seen three upward and two downward revisions in the same time frame.
As a result, the current quarter consensus estimate has dropped by 3.4% in the past two months, while the full year estimate has inched higher by 1.0%. You can see the consensus estimate trend and recent price action for the stock in the chart below:
On Assignment, Inc. Price and Consensus
On Assignment, Inc. Price and Consensus | On Assignment, Inc. Quote
This somewhat mixed trend is why the stock has just a Zacks Rank #3 (Hold) and why we are looking for in-line performance from the company in the near term.
.jpg)
Bottom Line
On Assignment is an inspired choice for value investors, as it is hard to beat its good lineup of statistics on this front along with a good industry rank (Top 28% out of more than 250 industries). In fact, over the past six months, the Zacks Staffing industry has clearly outperformed the broader market, as you can see below:
Notably, the stock has a long term expected earnings growth of 14% and sports a Zacks Rank #3. These mixed expectations indicate that while the stock’s growth story might be good over the long term, analysts have some apprehensions about the stock in the immediate future. So, value investors might want to wait for analyst sentiment to turn around in this name first, but once that happens, this stock could be a compelling pick.
The Best Place to Start Your Stock Search
Today, you are invited to download the full list of 220 Zacks Rank #1 "Strong Buy" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 "Strong Sells" and other private research. See these stocks free >>