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Is Barrett Business Services (BBSI) Stock Undervalued Right Now?

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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One company to watch right now is Barrett Business Services (BBSI - Free Report) . BBSI is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock has a Forward P/E ratio of 14.04. This compares to its industry's average Forward P/E of 22.62. 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 13.86.

We should also highlight that BBSI has a P/B ratio of 4.77. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 7.60. Over the past 12 months, BBSI's P/B has been as high as 9.36 and as low as 3.45, with a median of 4.84.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's 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. BBSI has a P/S ratio of 0.59. This compares to its industry's average P/S of 1.2.

Finally, our model also underscores that BBSI has a P/CF ratio of 11.65. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. BBSI's current P/CF looks attractive when compared to its industry's average P/CF of 18.06. Within the past 12 months, BBSI's P/CF has been as high as 22.59 and as low as 10.03, with a median of 13.57.

These are just a handful of the figures considered in Barrett Business Services's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that BBSI is an impressive value stock right now.


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