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Are Investors Undervaluing DLH (DLHC) Right Now?

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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.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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.

DLH (DLHC - Free Report) is a stock many investors are watching right now. DLHC is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.

Another valuation metric that we should highlight is DLHC's P/B ratio of 2.15. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. DLHC's current P/B looks attractive when compared to its industry's average P/B of 2.26. DLHC's P/B has been as high as 2.32 and as low as 1.23, with a median of 1.53, over the past year.

Finally, our model also underscores that DLHC has a P/CF ratio of 10.61. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. DLHC's P/CF compares to its industry's average P/CF of 10.84. DLHC's P/CF has been as high as 12.03 and as low as 5.85, with a median of 7.22, all within the past year.

Randstad Holding (RANJY - Free Report) may be another strong Staffing Firms stock to add to your shortlist. RANJY is a # 2 (Buy) stock with a Value grade of A.

Randstad Holding sports a P/B ratio of 2 as well; this compares to its industry's price-to-book ratio of 2.26. In the past 52 weeks, RANJY's P/B has been as high as 2.33, as low as 1.82, with a median of 2.07.

These figures are just a handful of the metrics value investors tend to look at, but they help show that DLH and Randstad Holding are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, DLHC and RANJY feels like a great value stock at the moment.


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