Barrett Business Services, Inc. (NASDAQ:BBSI)

low peg

12/18

DEC

A perfect defensive stock that has a strong moat, being protected from competition by the high price and preposturousness of the services they provide.

low PEG, strong price uptrend

This is one of my STARZ.
Here is the thought process on this STAR:
a) Divided rate over Zero
b) 3 Year Beta between -5 & +3
c) 15% + Insider ownership
d) No greater than -50% Growth rate for the last 3 years (tought= last couple of years so goo that insiders are still owning the stocks)
e) Current CAPS rating between 3 Stars & 5 Stars
Open to all Industries and Sectors screened this down to just 250 stocks. I like round numbers. 12 of them I already own through other screening tools. I tend to be somewhat conservative but looking for 3 things at this point in my investing:
1. Stability & Strength
2. Yield and Modest Growth
3. Strong Position within a sector regardless of whether the entire sector is strong or not. Each sector has to perform to some degree for the whole world economy to function. I am looking for 5 or more years down the road, ROI, and Growth.
Not looking for rockets, just stars. This is a Star!!

As companies scramble to make use of new government money and an economy that will be turning around, the quick will need a work force that can mobilize with them. I think BBSI can leverage their short term staffing in this period to long term contracts for the future.

Pretty solid company and payroll services are likely to be in higher demand once jobs start going up.

It'll improve as the economy improves.

2-4 yr play.
BBSI could gain for employers looking to staff with contract staff in short term, assuming economic growth and job growth in late 2010/2011.
http://www.barrettbusiness.com/staffing_services.htm

The only one I'm not actively buying right now as I have a bigger holding already, but the price is nice and they are in a holding pattern with the CA economy stalled. But long term I will buy and hold.

Human resource services along with the professional employer organization services to round out the business. This is partly a bet on management and partly a bet on employment coming back around. I have no doubts about management, and am pretty certain that employment (eventually) will start looking better, even in California where they do a lot of business. Watch for this one when employment numbers start improving, it can move fast.

great financials

CAPS Rating
4 - 4 on 2008-01-01
5 - 5 on 2009-09-10

Active Picks >= 250
% Below 12 Month High >= 15
4 Week Price Change % <= 75
Price-to-Earnings (TTM) <= 5
Price-to-Sales (TTM) <= 12
Price-to-Book (TTM) <= 3

Current Ratio >= 1
Current Dividend Yield % >= 1

Good growth and earnings.

I think its a good time to pick this stock

BBSI is well positioned to take off for the following reasons:
1) No debt - BBSI has access to capital, so they could bring in more cash as the downturn continues. More importantly, this company can fund itself through internal cash generation, and did so in 2008, an atrocious year for many companies.
2) Consistent performance since 2005. FCF's have remained fairly constant since 2005 (albeit in 2008 this was heped by lower than usual capex), but given the fact they didn;t fall off of a cliff in this economy, that alone should make it a buy.
3) A decent dividend that can be sustained with internally generated cash flow.

All in all, a strong performang company that is undervalued by the markt.

Under valued and waiting for economic recovery to soar. Long term keeper.

Getting through the toughest period now.