Barrett Business Services (NASDAQ: BBSI) provides a range of human resource management services to small and medium-sized U.S. businesses. The company offers both temporary and long-term staffing to some 2,300 clients, focusing on light industrial, clerical, and technical specialties. It also outsources such human resource services as payroll management, benefits administration and recruiting to about 1,200 clients. Barrett operates primarily on the coasts, through a total of 45 offices.

The company pleased investors last week, when it reported Q2 EPS of 29 cents and revenues of $269.4 million. Analysts had been expecting 22 cents and $264.2 million. Management also guided Q3 EPS to 34-36 cents (28 cent consensus) and Q3 revenues to $277-$282 million ($269.32M consensus). Roth Capital subsequently upgraded BBSI to "buy" status.

It is not difficult to find companies geared to offering business services to large corporate clients. The smaller company market can sometimes be underserved, though. So far as staffing and human resource functions are concerned, there is an outfit in Vancouver, Washington that specializes in the needs of the smaller firm.

Barrett Business Services (NASDAQ: BBSI) provides a range of human resource management services to small and medium-sized U.S. businesses. The company offers both temporary and long-term staffing to some 1,800 clients, focusing on light industrial, clerical, and technical specialties. It also outsources such human resource services as payroll management, benefits administration and recruiting to about 1,100 clients. Barrett operates primarily on the coasts, through a total of about forty offices. Five of those were added earlier in the month, when the firm acquired privately held Strategic Staffing.

The stock popped late last month, when JMP Securities upgraded the issue to "strong buy" status and declared a $31 price target. The broker spoke optimistically about the potential effects of the Strategic Staffing action. Shares have since been consolidating the gain in a bullish "flag" pattern. Prices frequently exit flags moving in the same direction they were traveling when they entered them. In this case, that would be to the upside.

Brokers recommend the issue with two "strong buys" and four "buys". The BBSI P/E ratio (18.83), Price to Sales ratio (1.16), Price to Book ratio (2.90), Price to Free Cash Flow ratio (23.49), EPS Growth rate (27.13%), Return on Assets (10.40%) and Return on Investment (15.37%) compare favorably with industry, sector and S&P 500 averages. Institutions own about 61% of the outstanding shares. Over the past 52 weeks, the stock has traded between $18.66 and $27.44. A stop-loss of $23.75 looks good here. Note that the firm is expected to report Q2 results on July 25th, after the close.

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com.