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 Wednesday, July 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.

Hudson Global Inc’s Value Grade

Value Grade:

Hudson Global, Inc. is a total talent solutions provider, which operates under the brand name Hudson RPO. The Company delivers customized recruitment outsourcing and total talent solutions to organizations worldwide. The Company’s core service offering is RPO, consisting of RPO and contracting services. It provides complete recruitment outsourcing, project-based outsourcing and recruitment consulting for clients’ permanent staff hires. The Company provides clients with a range of outsourced professional contract staffing services and managed service provider services sometimes offered on a standalone basis and sometimes as part of a blended total talent solution. These services draw upon a combination of specialized recruiting and project management competencies to deliver a range of solutions. Its clientele includes mid-to-large-cap multinational companies and government agencies. The Company operates in 14 countries with three geographic segments: Americas, Asia Pacific, and Europe.

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.

Hudson Global Inc has a Value Score of 69, which is considered to be undervalued.

When you look at Hudson Global Inc’s price-to-sales ratio at 0.35 compared to the industry median at 0.63, this company has a lower price relative to revenue compared to its peers. This could make Hudson Global Inc’s stock more attractive for value investors.

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. Hudson Global Inc’s shareholder yield is lower 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. Hudson Global Inc’s price-to-book ratio is lower than its industry median ratio of 1.73. This could make Hudson Global Inc more attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at Hudson Global Inc’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. Hudson Global Inc’s price-to-free-cash-flow ratio is lower than its industry median ratio of 16.71. This could make Hudson Global Inc more attractive because the lower P/FCF ratio indicates that Hudson Global 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.

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 97, which is considered to be undervalued.

GEE Group Inc’s price-earnings ratio is 6.5 compared to the industry median at 20.0. This means that it has a lower price relative to its earnings compared to its peers. This makes GEE Group Inc more attractive for value investors.

GEE Group Inc’s price-to-book ratio is higher than its peers. This could make GEE Group Inc less attractive for value investors when compared to the industry median at 1.73.

You can read more about GEE Group 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.

Korn Ferry’s Value Grade

Value Grade:

Korn Ferry is a global organizational consulting firm. The Company works with organizations to design their structures, roles, and responsibilities. Its businesses include consulting, digital, executive search, professional search & interim, and recruitment process outsourcing (RPO). Its consulting business aligns organizational structure, culture, performance, development, and people to drive growth by addressing four fundamental organizational and talent needs: organization strategy, assessment and succession, leadership and professional development, and total rewards. The Company's digital business builds, sells and delivers its technology products. Its executive search business helps organizations recruit board-level, chief executive, and other c-suite/senior executive and general management talent. Its professional search & interim business delivers enterprise talent acquisition solutions. The Company's RPO business offers scalable recruitment outsourcing and projects solutions.

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.

Korn Ferry has a Value Score of 61, which is considered to be undervalued.

Korn Ferry’s price-earnings ratio is 20.0 compared to the industry median at 20.0. This means that it has a higher price relative to its earnings compared to its peers. This makes Korn Ferry fairly attractive for value investors.

Korn Ferry’s price-to-book ratio is lower than its peers. This could make Korn Ferry more attractive for value investors when compared to the industry median at 1.73.

You can read more about Korn Ferry’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.

Trucept Inc’s Value Grade

Value Grade:

Trucept, Inc. provides marketing, accounting and human resource services to a range of industries, including staffing, professional employment organizations and hospitality. It has two subsidiaries. Afinida Inc. offers various services, including payroll services, which includes payroll processing, cloud-based software, direct deposits, new hire reporting and others, and payroll tax services, which includes payroll tax payments, filings and compliance services. Afinida Insurance Services, Inc. offers employee benefits, which include medical/dental/vision plans, supplemental insurance, and life insurance and cafeteria plans; commercial lines, which includes workers' compensation, business owners’ policies, property insurance, general liability insurance and employment practices liability insurance; and individual policies, which includes medical, dental and vision plans, supplemental insurance, life insurance and home owners/condo/renters insurance.

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.

Trucept Inc has a Value Score of 98, which is considered to be undervalued.

Trucept Inc’s price-earnings ratio is 1.4 compared to the industry median at 20.0. This means that it has a lower price relative to its earnings compared to its peers. This makes Trucept Inc more attractive for value investors.

Trucept Inc’s price-to-book ratio is higher than its peers. This could make Trucept Inc less attractive for value investors when compared to the industry median at 1.73.

You can read more about Trucept 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.

• Hudson Global Inc stock has a Value Grade of B.
• GEE Group Inc stock has a Value Grade of A.
• Korn Ferry stock has a Value Grade of B.
• Trucept Inc stock has a Value Grade of A.

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 Wednesday, July 10
• Why Kelly Services, Inc.’s (KELYA) Stock Is Down 5.61%
• Why ManpowerGroup Inc’s (MAN) Stock Is Down 6.07%
• Why Robert Half Inc’s (RHI) Stock Is Down 5.30%

AAII Disclaimer

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