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

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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.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of 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.

One company value investors might notice is Barrett Business Services (BBSI - Free Report) . BBSI is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 15.02, which compares to its industry's average of 23.73. Over the past year, BBSI's Forward P/E has been as high as 19.73 and as low as 10.05, with a median of 13.85.

Investors should also recognize that BBSI has a P/B ratio of 5.11. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 7.89. Over the past year, BBSI's P/B has been as high as 9.36 and as low as 3.45, with a median of 4.83.

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 0.65. This compares to its industry's average P/S of 1.15.

Finally, investors should note that BBSI has a P/CF ratio of 12.47. 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 P/CF compares to its industry's average P/CF of 18.20. Over the past 52 weeks, BBSI's P/CF has been as high as 22.59 and as low as 10.03, with a median of 13.25.

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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