Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One stock to keep an eye on is Ranger Energy Services, Inc. (RNGR). RNGR is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 7.78. This compares to its industry's average Forward P/E of 20.19. Over the past year, RNGR's Forward P/E has been as high as 20.17 and as low as 5.30, with a median of 10.69.
Another notable valuation metric for RNGR is its P/B ratio of 0.58. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. RNGR's current P/B looks attractive when compared to its industry's average P/B of 1.31. Over the past year, RNGR's P/B has been as high as 0.91 and as low as 0.39, with a median of 0.65.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. RNGR has a P/S ratio of 0.34. This compares to its industry's average P/S of 0.76.
Value investors will likely look at more than just these metrics, but the above data helps show that Ranger Energy Services, Inc. Is likely undervalued currently. And when considering the strength of its earnings outlook, RNGR sticks out at as one of the market's strongest value stocks.
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