Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 4 stocks made the list for top value stocks in the Employment Services industry. Those looking for value stocks to add to their portfolio may want to use this list as a starting point for further investment research.

Why Focus on Undervalued Employment Services Stocks?

Value investors seek to buy stocks at a discount to their intrinsic value. Long-term returns show that such strategies are advantageous. Value stocks, as a group, tend to outperform growth stocks over extended periods of time. Typically, value investors perform financial analysis of numerous metrics, don’t follow the herd and are long-term investors.

AAII’s A+ Investor Value Grade is derived from a stock’s Value Score. The Value Score is the percentile rank of the average of the percentile ranks of the price-to-sales ratio, price-earnings ratio, enterprise-value-to-EBITDA (EV/EBITDA) ratio, shareholder yield, price-to-book-value ratio and price-to-free-cash-flow ratio. The score is variable, meaning it can consider all six ratios or, should any of the six ratios not be valid, the remaining ratios that are valid. To be assigned a Value Score, stocks must have a valid (non-null) ratio and corresponding ranking for at least two of the six valuation ratios.

What Goes Into AAII’s Value Grade?

Stock evaluation requires access to huge amounts of data as well as the knowledge and time to sift through it all, make sense of financial ratios, read income statements and analyze recent stock movement. AAII created A+ Investor, a robust data suite that condenses data research in an actionable and customizable way suitable for investors of all knowledge levels, to help investors with that task.

AAII’s proprietary stock grades come with A+ Investor. These offer intuitive A–F grades for more than just value. It is possible for a stock to appear cheap based on one valuation metric but appear expensive on another. It is also possible for one valuation ratio to be associated with outperforming stocks during certain periods of time but not others. Some stocks may even have null values for certain metrics like the price-earnings ratio or the price-to-book ratio but not others. An example of this would be a company with losses instead of profits or a negative book value because of heavy borrowing. Negative earnings or book value result in non-meaningful ratios that are left blank or null.

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4 Undervalued Employment Services Stocks

Of course, there are countless value stocks that are worth mentioning, but this is a concise list of the top 4 undervalued stocks in the Employment Services industry for Monday, June 10, 2024. Let’s take a closer look at their individual scores to see how they measure up against each other and the Employment Services industry median.

The Value Grade is assigned based on how each stock’s composite valuation compares to all other stocks.

The process for assigning grades starts with each variable for a given stock. The percentile rankings for all valid ratios that a stock has are calculated. So, for instance, a stock could have a price-to-book ranking in the 43rd percentile, a price-earnings ranking in the 67th percentile, a price-to-sales ranking in the 23rd percentile, etc. Then, those rankings are averaged for each stock. (A minimum of two valid variables are required, though all six will be used if available.)

Once the average of the individual variables is calculated, that average is ranked against all stocks. Put another way, each stock’s composite valuation is compared to all other stocks. These ranks are then sorted into quintiles from the cheapest 20% (a grade of A) to the most expensive 20% (a grade of F).

As always, we recommend that you conduct proper due diligence and research before investing in any security. We also suggest that investors utilize numerous grades, not just value, when it comes to deciding whether a company is a good fit for their allocation needs.

GEE Group Inc’s Value Grade

Value Grade:

GEE Group Inc. is a provider of permanent and temporary professional and industrial staffing and placement services in and near several United States cities. The Company offers services through its two segments: Industrial Staffing Services and Professional Staffing Services. The Company specializes in the placement of information technology, accounting, finance, office, and engineering professionals for direct hire and contract staffing for its clients, data entry assistants (medical scribes) who specialize in electronic medical records (EMR) services for emergency departments, specialty physician practices and clinics, and provide temporary staffing services for its industrial clients. It provides various services, such as direct hire placement services, and temporary professional contract services staffing in the fields of information technology, engineering, medical, and accounting, and temporary contract industrial staffing.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

GEE Group Inc has a Value Score of 96, which is considered to be undervalued.

When you look at GEE Group Inc’s price-to-sales ratio at 0.29 compared to the industry median at 0.63, this company has a lower price relative to revenue compared to its peers. This could make GEE Group Inc’s stock more attractive for value investors.

GEE Group Inc’s price-earnings ratio is 7.39 compared to the industry median at 19.80. This means it has a lower share price relative to earnings compared to its peers. This could make GEE Group Inc more attractive for value investors.

Now, let’s assess GEE Group Inc’s EV/EBITDA ratio, also known as enterprise multiple. At 10.0, when compared to the industry median of 13.1, the company may be considered undervalued in relation to its peers. Value investors could use the enterprise multiple to identify stocks that are considered overvalued or undervalued relative to their industry.

Shareholder yield is the sum of a stock’s dividend yield (paid over previous 12 months minus special dividends) and the percentage of net share buybacks over the previous 12 months. GEE Group Inc’s shareholder yield is higher than its industry median ratio of 2.80%. Value investors may look for an attractive shareholder yield because it can be a powerful tool for identifying if the company has a good management team.

As one of the most common value metrics, the price-to-book ratio evaluates a company’s current market price relative to its book value. GEE Group Inc’s price-to-book ratio is lower than its industry median ratio of 1.62. This could make GEE Group Inc more attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at GEE Group Inc’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. GEE Group Inc’s price-to-free-cash-flow ratio is lower than its industry median ratio of 16.48. This could make GEE Group Inc more attractive because the lower P/FCF ratio indicates that GEE Group Inc is undervalued. The P/FCF ratio metric can also be viewed over a long-term time frame to see if the company's cash flow to share price value is generally improving or worsening.

Kelly Services, Inc.’s Value Grade

Value Grade:

Kelly Services, Inc. is a specialty talent and workforce solutions provider operating throughout the world. The Company operates through five segments: Professional & Industrial (P&I;), Science, Engineering & Technology (SET), Education, Outsourcing & Consulting Group (OCG) and International. P&I; segment delivers staffing, outcome-based and permanent placement services, providing administrative, accounting and finance, light industrial and contact center staffing and other workforce solutions in the United States and Canada. The SET segment delivers staffing, outcome-based and permanent placement services focused on science and clinical research, engineering, technology and telecommunications specialties. Its OCG segment delivers talent solutions including managed service provider (MSP), payroll process outsourcing (PPO), recruitment process outsourcing (RPO), and talent advisory services. International segment also delivers RPO talent solutions within its local markets.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Kelly Services, Inc. has a Value Score of 89, which is considered to be undervalued.

Kelly Services, Inc.’s price-earnings ratio is 15.5 compared to the industry median at 19.8. This means that it has a lower price relative to its earnings compared to its peers. This makes Kelly Services, Inc. more attractive for value investors.

Kelly Services, Inc.’s price-to-book ratio is higher than its peers. This could make Kelly Services, Inc. less attractive for value investors when compared to the industry median at 1.62.

You can read more about Kelly Services, Inc.’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

ManpowerGroup Inc’s Value Grade

Value Grade:

ManpowerGroup Inc. is a workforce solutions company. The Company's workforce solutions and services include recruitment and assessment, upskilling, reskilling, training and development, career management, outsourcing, and workforce consulting. The Company's portfolio of recruitment services includes permanent, temporary and contract recruitment of professionals, as well as administrative, industrial and information technology (IT) professional positions. These services are provided under its Manpower and Experis brands. Its Talent Solutions brand specializes in the delivery of customized workforce strategies and new solutions and creating added value that addresses its clients’ complex global workforce needs. Its Talent Solutions combine global offerings of recruitment process outsourcing (RPO), TAPFIN - Managed Service Provider (MSP) and right management to provide data-driven capabilities that help organizations with their workforce transformation.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

ManpowerGroup Inc has a Value Score of 65, which is considered to be undervalued.

ManpowerGroup Inc’s price-earnings ratio is 73.4 compared to the industry median at 19.8. This means that it has a higher price relative to its earnings compared to its peers. This makes ManpowerGroup Inc less attractive for value investors.

ManpowerGroup Inc’s price-to-book ratio is lower than its peers. This could make ManpowerGroup Inc fairly attractive for value investors when compared to the industry median at 1.62.

You can read more about ManpowerGroup Inc’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

R C M Technologies Inc’s Value Grade

Value Grade:

RCM Technologies, Inc. is a business and technology solutions provider through the deployment of engineering, specialty health care and information technology services. The Company operates through three segments: Specialty Health Care, Engineering, and Life Sciences and Information Technology services (LS⁢). The Specialty Health Care segment provides staffing solutions including medical health care professionals, health information management professionals, nurses, paraprofessionals, physicians, and therapists. The Engineering segment provides a comprehensive portfolio of engineering and design services across three verticals: energy services, process and industrial and aerospace. The LS⁢ segment provides enterprise business solutions, application services, IT infrastructure solutions, life sciences solutions and other vertical-specific offerings. This segment also includes data solutions, digitization, recruiting process outsourcing, human capital management solutions, and more.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

R C M Technologies Inc has a Value Score of 79, which is considered to be undervalued.

R C M Technologies Inc’s price-earnings ratio is 9.6 compared to the industry median at 19.8. This means that it has a lower price relative to its earnings compared to its peers. This makes R C M Technologies Inc more attractive for value investors.

R C M Technologies Inc’s price-to-book ratio is lower than its peers. This could make R C M Technologies Inc more attractive for value investors when compared to the industry median at 1.62.

You can read more about R C M Technologies Inc’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Other Employment Services Stock Grades

Value is just one of the five Stock Grades included in our A+ Investor service. AAII members can see the top-graded stocks—those with grades of A or B for value, growth, momentum, earnings estimate revisions and quality—on the A+ Stock Grades Screener.

Also, if you want full access to all of AAII’s premium services, you can subscribe to one convenient bundled plan called AAII Platinum where you can try out A+ Investor, AAII Dividend Investing, the Stock Superstars Report, Growth Investing and VMQ Stocks. With the other premium services, you can dive deep into additional metrics, portfolios, commentary and information about Employment Services stocks as well as other industrys.

Choosing Which of the 4 Best Employment Services Stocks Is Right for You

Choosing which value stocks to invest in will ultimately depend on your individual goals and allocation; however, comparing similar value stocks in the same industry can help you analyze which might be better investments for you in the long run. So, let’s take a look at the Value Grade for all of our stocks.

• GEE Group Inc stock has a Value Grade of A.
• Kelly Services, Inc. stock has a Value Grade of A.
• ManpowerGroup Inc stock has a Value Grade of B.
• R C M Technologies Inc stock has a Value Grade of B.

Now that you have a bit more background about each of the 4 undervalued stocks in the Employment Services industry as well as their overall grades, it’s time for you to conduct additional research to see if these could fit your portfolio needs based on your goals and risk tolerance. AAII can help you figure out both and identify which investments align with what works best for you.

We do so through a program of education that teaches you to invest for yourself and become an effective manager of your own wealth—no more relying on others for your financial independence. You can rely on AAII for timeless articles on financial planning and stock-picking, unbiased research and actionable analysis that makes you a better investor.

A+ Investor adds to that qualitative teaching by giving you a powerful data suite that helps you whittle down investment decisions to find stocks, exchange-traded funds (ETFs) or mutual funds that meet your needs.

Additional Resources About Employment Services Stocks

Want to learn more about Employment Services stocks to see if they could be the right investment for you? Check out some additional resources and articles to help you on your financial journey.

• 4 Undervalued Employment Services Stocks for Monday, June 10
• 4 Undervalued Employment Services Stocks for Friday, June 07
• Why Upwork Inc’s (UPWK) Stock Is Up 4.78%
• 3 Undervalued Employment Services Stocks for Monday, May 27

AAII Disclaimer

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