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BBSI Is Still Going To $55 In My Opinion

|Includes: Barrett Business Services, Inc. (BBSI)

So, the SEC has BBSI in its sights. This is certainly not good news for BBSI, its management and its shareholders. However, I don't think it's necessarily that bad.

Why is the SEC looking at BBSI? They are going after accounting issues regarding the recent charges for underreserving on workers comp. This investigation is most likely sparked by the numerous shareholder lawsuits filed against BBSI.

The shareholder lawsuits are meaningless. They will be dismissed and are just a bunch of ambulance chasers looking for low hanging fruit; which BBSI isn't.

The charges taken by BBSI were quite significant. However, is this worthy of an SEC investigation? The workers comp accounting and charges were all audited by independent third parties. There is no criminal activity here, to the best of my knowledge.

The bottom line? The SEC is investigating simply due to the large charge and the shareholder lawsuits. I believe the lawsuits will be dismissed in the next couple months. And, I believe that the SEC will go away empty handed as well.

If I'm wrong, the company most likely simply gets fined. If I'm right, all is forgiven. Either way, it doesn't affect current business and that is very strong for BBSI.

The best time to buy stocks is when there is blood in the street. BBSI is bleeding. Time to step in and take advantage.

Disclosure: The author is long BBSI.

Additional disclosure: Investing in BBSI involves a high degree of risk. The SEC investigation is a major wild card. Do your due diligence and invest wisely. I'm long BBSI, but you should make your own decisions here.