This business services company is forecast to grow 24.8% annually over the next five years.
CBIZ, Inc. (CBZ)
From Positive Patterns
CBIZ Inc. is a neat little insurance/brokerage outfit in Cleveland. And if that sounds boring; it is. But the returns are good! CBZ offers financial, insurance, tax and advisory services. The biggest revenues are from its very profitable Insurance Brokerage/offices. The company has three distinct sectors—Insurance & Benefits, Financial Services, and National Practices. The divisions offer accounting and tax services, healthcare consulting, financial advisory, valuations for businesses, and most of all—risk and insurance services. CBZ is mostly Midwest-based and serves the smaller- to mid-level-business market, owning a nice niche.
CBZ sells for about 22 times 2022 earnings, and about 14 times cash flow (it throws off handsome free cash flow). With a market cap of about $2 Billion, CBZ has net debt of about $150 million, and maybe less than that, as CBZ carries a very conservative accounting ledger. The company does a good job of growing profits.
I always look at Seeking Alpha to see write-ups on my stocks, and it is interesting to note that nobody follows CBZ. The last write-up was in 2018, and before that 2014. So, this is the very definition of obscure quality. Totally ignored on Wall Street. Zack’s shows one lonely analyst following it, and that’s ok with us. In fact, I really like it when I can find good stocks that nobody in my business pays any attention to. That’s the way TPL was 5 years ago.
CBZ was $15 in 2013; $27 in 2018. And now, three years later. it’s $39. I think we see nice/quiet steady progress here. and I will move my buy up to $40 but won’t chase it past that.
Bob Howard, Positive Patterns, P.O. Box 310, Turners, MO 65765, 417-887-4486, November 26, 2021