Barrett Business Services: Winner in Outsourcing

Barrett Business Services: Winner in Outsourcing

Barrett Business Services: Winner in Outsourcing

Nothing marks the progress and growth of a business more than the results received at the end of each financial quarter. Owing to this, the newest underdog to come into the limelight with strong financial results in their fourth quarter for 2012 happens to be Barrett Business Services, Inc. (NASDAQ: BBSI). With net revenues amounting to $402.7 million, the business also enjoyed an increase of around 28 percent and $13.1 million in profits as compared to 2011. This provides a definite indication that the company is enjoying an overall growth. In addition, the introduction of over 143 clients to their database in 2012 boosted their year-over-year revenue by 74 percent.

With such marked increases, the future seems rosy for this little business which provides human resource outsourcing solutions. Their dedication to customer satisfaction allows for successful customer retention and promising solid gains. The company’s shares have risen in value over 150 percent in the past year. The fact that the resource outsourcing market is expected to grow to $162 billion by 2015, positions Barrett Business Services to catch the wave.

Although a small-cap in the stock market along with companies like Ebix (NASDAQ: EBIX), Amedisys (NASDAQ: AMED), the business does not lack investors. Luckily, Barrett’s ability to grow and a 90 percent rate of retention has acted like a beacon for the business, allowing it to show off its remarkable gains and has successfully caused many investors to take note. With branches of the business established in 10 states, 57 regional offices, and providing their services in 23 states, investors consider Barrett Business Services as a solid investment. Additionally, there is ample room for the business to evolve and expand. The CEO, Michael Eilch, and the CFO, Jim Miller, predict a strong growth in the business’s clientele database and revenue over the upcoming months.

However, despite such favorable numbers and predictions, BBSI is not entirely free from risks. When announcing the report for strong financial profits and predicted growth, Barret also pointed out the impact of factors such as negative publicity regarding outsourcing, unforeseen liabilities, and increase in worker’s compensation, could become risk factors that may affect the growth and the output of the revenue generated by the company.

Barrett Business Services also faces competition in the market by other businesses like Manpower Inc. (NYSE: MAN) and Kelly Services Inc. (NASDAQ: KELYA), which also offer services which are similar in nature to those offered by Barrett and belong to the same outsourcing field. However, the company so far retains its profit and lead in the market and truly showcases that strong customer satisfaction can create win-win situations for everyone involved. Luckily investors looking for new investment opportunities or good deals in the market can quickly latch onto Barret Business Services. 

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  • entresean

    Impressive figures from Barret. But I’d like to see what happen this quarter. I think it’s time to add this to portfolio, however.

  • Brian Prescott

    A recovering economy leaves ample room to grow for players like BBSI in addition to bigger guys like MAN and KELYA. My concern is with the price to be paid to buy a slice of this business. MAN and KELYA are not just bigger, they offer more bang for money too.