Copperfield Research Slams Barrett Business Services

Barrett Business Services, Inc. BBSI shares fell Tuesday afternoon amid the release of an adverse analyst note from Copperfield Research. The note suggested the company’s fair value range is between $0.00 to $8.76 with 65 percent to 100 percent downside.

The report concluded that the analysis “reveals another crippling reserve charge is required, a high probability of an equity raise, pricing anomalies, and other major red flags.”

The firm commented that “Barrett Business Services (BBSI) has suffered a precipitous stock price decline over the last two months as the confession process has begun.

“Despite a stock price down nearly 75 percent from its highs, we believe the risk speculating in BBSI's common stock has never been higher. Simply put, a $100 stock that goes to $25 generates a smaller percentage loss than a $25 stock that goes to $0.

“Uninformed investors/traders appear to have fallen victim to the dangerous temptation of assuming the worst is behind BBSI, declaring the bottom is in, the bounce is at hand, or as the irresponsible sell-side has proclaimed - the decks have been cleared.”

Commenting on the company’s pricing for workers compensation premiums and marketing, the report noted that “we have trouble discerning whether BBSI is using false advertising, is taking extreme liberties with its marketing material, or is simply delusional with its assumed loss rates (which would help explain years of writing business that was unprofitable).”

After plummeting more than 8 percent, Barrett Business Services recently traded at $23.01, down 5 percent.