Should value investors buy Ranger Energy Services (RNGR) shares?

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly monitoring the latest trends in value, growth and momentum to find strong companies for our readers.

Value investing is undoubtedly one of the most popular methods for finding great stocks in any market environment. Value investors rely on traditional forms of analysis of key valuation metrics to find stocks they believe are undervalued and have room for gains.

In addition to the Zacks Rank, investors can also use our innovative Style Scores system to find stocks with specific traits. For example, value investors should focus on the Value category. Stocks with high Zacks Ranks and “A” grades for Value are among the highest-quality value stocks on the market today.

One company that might catch the eye of value investors is Ranger Energy Services (RNGR)RNGR currently has a Zacks Rank of #2 (Buy) as well as an A grade for Value. The stock has a Forward P/E ratio of 5.17. This compares to the industry’s average Forward P/E of 11.08. Over the past year, RNGR’s Forward P/E has ranged from 16.54 to 5.02, with a median of 8.26.

Investors should also be aware that RNGR has a P/B ratio of 0.91. The P/B ratio compares a stock’s market value to its book value, which is defined as total assets minus total liabilities. This stock’s P/B looks attractive when compared to the industry average of 2.19. Over the past 12 months, RNGR’s P/B has ranged from 1.11 to 0.78, with a median of 1.02.

Value investors also use the P/S ratio. The P/S ratio is calculated by dividing price by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it might be a truer indicator of performance. RNGR has a P/S ratio of 0.4. This compares to its industry’s average P/S ratio of 0.64.

Finally, investors should know that RNGR has a P/CF ratio of 4.16. This metric focuses on a company’s operating cash flow and is often used to find stocks that are undervalued due to their strong cash perspective. This company’s current P/CF looks solid compared to the industry average of 9.71. Over the past year, RNGR’s P/CF has ranged from 6.02 to 2.88, with the median being 3.93.

Another great oil and gas field services stock you might consider is Smart Sand (SND)a #1 stock (Strong Buy) with a Value Score of A.

Smart Sand also has a P/B ratio of 0.32 while the industry’s price-to-book ratio is 2.19. Over the past year, the P/B ratio has been 0.88, 0.26 and the median of 0.37.

These are just some of the numbers that went into evaluating Ranger Energy Services and Smart Sand as great value. Nevertheless, they show that the stock is likely undervalued right now. Add this to the strong earnings outlook and it’s clear that RNGR and SND are an impressive value stock right now.

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