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I am generally not a fan of the business service sector. The vagaries of service providers in the industry often leave me at a loss to rationalize how profits can be realized except through beating to death the "squeezing the fat out" idea that wears pretty thin - especially during election year. But I digress.

Screening stocks to discover candidates for inclusion in my speculative portfolio has brought Barrett Business Services (NASDAQ:BBSI) to my attention. Barrett Business Services offers a wide range of human resource management tools to assist small and medium-sized companies manage a wide array of employment related services. All types of on-demand staffing needs are serviced. Money management expertise is provided to the extent that BBSI actually enters into a contract to become a co-employer of the company's existing workforce and assume management for most or all of the human resource responsibilities.

Control means actually being able to "squeeze the fat out" without the usual outside staffing constraints. Barrett has been successful in headhunting for specific employee positions and staffing customers to other companies. Barrett Business Services, better than most if not all other companies in the business staffing arena, has the expertise to handle almost all components of their client's business.

For the small and medium-sized companies that Barrett focuses on, this is exactly what I believe owners want - leave the staffing and "fat squeezing" issues to Barrett while they pursue growing their company's product and market share.

BBSI's share price has fallen from approximately $27.00 to $17.87 per share and appears to have bottomed. Volume is about 50,000 shares/day. It has a market cap of about $200m, a PE of 11.5 and a dividend of 1.62%. The "up-down" stock pattern indicates that the stock is under accumulation. The 50 day moving average is trending upward weakly which is very good considering the market action as a whole.

Last week, Barrett successfully completed the acquisition of First Employment Services, formerly a privately-held staffing company headquartered in Tempe, AZ.

I have overlooked the sector of business where BBSI resides. My bad. This company appears to be in great shape to provide excellent and sustainable returns to investors, versus other like companies. To get a more detailed look at this company, go to their website.

Full Disclosure: The author does not hold a position in BBSI.

Source: A Good Time To Buy Barrett Business Services