Should Value Investors Buy These Business Services Stocks?

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.

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 use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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.


DLH (DLHC)

is a stock many investors are watching right now. DLHC is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock holds a P/E ratio of 12.18, while its industry has an average P/E of 13.36. DLHC’s Forward P/E has been as high as 16.98 and as low as 11.11, with a median of 13.76, all within the past year.

Investors should also recognize that DLHC has a P/B ratio of 2.95. 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 3.32. Over the past 12 months, DLHC’s P/B has been as high as 4.06 and as low as 2.09, with a median of 2.42.

Finally, investors should note that DLHC has a P/CF ratio of 10.91. This metric takes into account a company’s operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This stock’s P/CF looks attractive against its industry’s average P/CF of 22.24. Within the past 12 months, DLHC’s P/CF has been as high as 15.21 and as low as 8.25, with a median of 9.45.

If you’re looking for another solid Staffing Firms value stock, take a look at

Randstad Holding (RANJY)

. RANJY is a # 2 (Buy) stock with a Value score of A.

Furthermore, Randstad Holding holds a P/B ratio of 2.27 and its industry’s price-to-book ratio is 3.32. RANJY’s P/B has been as high as 2.86, as low as 2.09, with a median of 2.46 over the past 12 months.

These are just a handful of the figures considered in DLH and Randstad Holding’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 RANJY is an impressive value stock right now.


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