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

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The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

Barrett Business Services (BBSI - Free Report) is a stock many investors are watching right now. BBSI is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 12.23, which compares to its industry's average of 18.86. BBSI's Forward P/E has been as high as 14.23 and as low as 10.60, with a median of 12.21, all within the past year.

Investors will also notice that BBSI has a PEG ratio of 0.87. 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. BBSI's PEG compares to its industry's average PEG of 1.89. BBSI's PEG has been as high as 1.02 and as low as 0.71, with a median of 0.86, 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. BBSI has a P/S ratio of 0.59. This compares to its industry's average P/S of 1.02.

Finally, we should also recognize that BBSI has a P/CF ratio of 11.81. 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 15.35. Over the past 52 weeks, BBSI's P/CF has been as high as 13.56 and as low as 10.11, with a median of 11.80.

If you're looking for another solid Outsourcing value stock, take a look at Cap Gemini (CGEMY - Free Report) . CGEMY is a # 2 (Buy) stock with a Value score of A.

Shares of Cap Gemini are currently trading at a forward earnings multiple of 14.26 and a PEG ratio of 1.65 compared to its industry's P/E and PEG ratios of 18.86 and 1.89, respectively.

Over the last 12 months, CGEMY's P/E has been as high as 18.65, as low as 12.85, with a median of 15.54, and its PEG ratio has been as high as 1.88, as low as 1.12, with a median of 1.38.

Additionally, Cap Gemini has a P/B ratio of 3.06 while its industry's price-to-book ratio sits at 12.38. For CGEMY, this valuation metric has been as high as 3.55, as low as 2.69, with a median of 3.11 over the past year.

These are only a few of the key metrics included in Barrett Business Services and Cap Gemini strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, BBSI and CGEMY look like an impressive value stock at the moment.


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Barrett Business Services, Inc. (BBSI) - free report >>

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