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Should Value Investors Buy DLH (DLHC) Stock?

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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore 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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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.

One stock to keep an eye on is DLH (DLHC - Free Report) . DLHC is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value.

Another notable valuation metric for DLHC is its P/B ratio of 0.71. 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. DLHC's current P/B looks attractive when compared to its industry's average P/B of 1.46. DLHC's P/B has been as high as 1.30 and as low as 0.35, with a median of 0.73, over the past year.

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. DLHC has a P/S ratio of 0.22. This compares to its industry's average P/S of 0.31.

If you're looking for another solid Staffing Firms value stock, take a look at Kelly Services (KELYA - Free Report) . KELYA is a Zacks Rank of #2 (Buy) stock with a Value score of A.

Shares of Kelly Services are currently trading at a forward earnings multiple of 5.51 and a PEG ratio of 0.42 compared to its industry's P/E and PEG ratios of 12.33 and 0.91, respectively.

KELYA's Forward P/E has been as high as 7.98 and as low as 4.45, with a median of 5.32. During the same time period, its PEG ratio has been as high as 0.61, as low as 0.34, with a median of 0.41.

Furthermore, Kelly Services holds a P/B ratio of 0.39 and its industry's price-to-book ratio is 1.46. KELYA's P/B has been as high as 0.62, as low as 0.31, with a median of 0.38 over the past 12 months.

These are just a handful of the figures considered in DLH and Kelly 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 DLHC and KELYA is an impressive value stock right now.


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