The S&P 500, the Nasdaq, and the Dow all hit fresh all-time highs after Oracle bolstered the case for the artificial intelligence spending boom last week. A large portion of stock market gains this year have been fueled by the bullish outlook for AI spending that’s leading to massive earnings growth.
The other pillar of the stock market, along with AI-boosted earnings growth, appears secure. The Fed is nearly certain to lower interest rates on Wednesday.
That said, a healthy pullback could be due after the huge rally off the April lows.
Investors who want to stay exposed to the stock market right now, but don’t want to try to chase soaring tech stocks, might decide to focus on value stocks.
Let’s dive into how investors can screen for stocks that offer the winning combination of impressive value and improving earnings outlooks as the stock market soars to new highs.
The screen we are digging into today comes loaded with the Research Wizard and aims to sort through highly-ranked Zacks stocks to find some of the top value names.
This value-focused screen searches only for stocks that boast Zacks Rank #1 (Strong Buys) or #2 (Buys). It also focuses on stocks with price-to-earnings (P/E) ratios under the median for its industry. The screen also looks for stocks with price-to-sales (P/S) ratios under the median for its industry to help lock in relative value compared to its peers, since basing it off the wider market is not always the most useful tool.
The screen then digs into quarterly earnings rates above the median for its industry. This particular Zacks screen also uses a special blend of upgrades and estimates revisions to select the best seven stocks in this list.
The screen basics are listed below…
· Only Zacks Rank #1 (Strong Buy) or #2 (Buy) Stocks
· P/E (using 12-month EPS) – Under the Median for its Industry
· P/S – Under the Median for its Industry
· Percentage Change Act. EPS Q(0)/Q(-1)
· Rating Change and Revisions Factors (to help narrow the list to the 7 best stocks in this list)
This strategy comes loaded with the Research Wizard and it is called bt_sow_value_method1. It can be found in the SoW (Screen of the Week) folder.
The screen is pretty simple, yet powerful. Here is one of the seven stocks that made it through this week’s screen…
Ranger Energy Services RNGRprovides high specification mobile rig well services, cased hole wireline services, and ancillary services within the U.S. oil and gas industry.
The Houston-based company helps work through the entire lifecycle of a well, from completion, production, maintenance, intervention, and workover to the abandonment phase.
Zacks Investment Research
Image Source: Zacks Investment Research
Ranger Energy operates through three main segments: High Specification Rigs, Processing Solutions and Ancillary Services, and Wireline Services.
RNGR stock has soared 420% in the past five years to blow away its Oil and Gas – Field Services industry’s 120% run and the S&P 500’s 99%. The stock is trying to break out meaningfully above its post-IPO highs from 2017 after doing so briefly in late 2024/early 2025.
Zacks Investment Research
Image Source: Zacks Investment Research
RNGR’s earnings outlook has surged recently to help it earn a Zacks Rank #1 (Strong Buy). The oil and gas services company is projected to grow its adjusted earnings per share (EPS) by 53% in 2025 and another 11% next year.
Ranger Energy trades 16% below its average Zacks price target and pays a dividend. On the valuation front, RNGR trades at an 18% discount to the broader Zacks Oil and Gas sector and 25% below its industry at 10.6X forward 12-month earnings. Better yet, Ranger Energy trades at a roughly 50% discount to its own highs.
Get the rest of the stocks on this list and start looking for the newest companies that fit these criteria. It’s easy to do. And it could help you find your next big winner. Start screening for these companies today with a free trial to the Research Wizard. You can do it.
Click here to sign up for a free trial to the Research Wizard today.
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Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
Disclosure: Performance information for Zacks’ portfolios and strategies are available at: www.zacks.com/performance_disclosure
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