Given the mining sector's size on the ASX exchange, it may not be practical for ASX investors to avoid the industry entirely.

One alternative that investors can consider is the mining services sector, which includes companies that provide various services to miners.

This approach can help mitigate the impact of commodity price fluctuations, but many of these ASX shares are in the small and mid-cap space, which may lead to higher volatility.

The $GR Engineering Services Ltd (GNG.AU)$ share price has fallen approximately 20% in about six months from its 52-week high of $2.45 on 12 February 2024.

This is a larger drop compared to bigger mining companies like $BHP Group Ltd (BHP.AU)$ or $Rio Tinto Ltd (RIO.AU)$, whose share prices have fallen approximately 10% during the same period.

However, the higher volatility may also present more opportunities to profit if a stock is undervalued unjustly.

Could this be the case for GR Engineering shares? Let's find out.

Why is the GR Engineering share price so low?

It is simply because no mining-related company can be completely immune to the commodity cycle.

GR Engineering shares have primarily traded between the $2.2 to $2.5 level since the beginning of the year despite weak commodity prices globally. However, the share price broke down to that level when mining giant BHP Group announced a temporary suspension of its Nickel West operations and the West Musgrave Project, as my colleague James highlighted.

GR Engineering had signed contracts with BHP to design and construct the West Musgrave Project, which could have been one of the company's most significant projects. GR Engineering expects this suspension will impact its expected FY25 revenue by up to $80 million.

Too cheap to ignore?

GR Engineering shares are valued at 11.5x its trailing 12 months' earnings per share (EPS). Its historical price-to-earnings (P/E) ratios ranged between 7.5x and 18x.

There is good news and bad news. The bad news is that GR Engineering's earnings fluctuated greatly in the past down cycles, indicating that future earnings might be lower, leading to a higher P/E multiple on a forward basis.

The good news is that the company has exposure to many gold-related projects, and the price of gold has increased by 25% in the past year, approaching its all-time high.

GR Engineering shares offer a dividend yield of 9.6%, which is attractive even if we consider some probability this might fall in the coming year in case its earnings fall.

The company also has a clean balance sheet with $58 million in cash, equivalent to 18% of its current market capitalisation. This means when you buy GR Engineering shares today for approximately $2, it will include 40 cents in cash and $1.6 for all its business operations.

The GR Engineering share price is down 0.25% today and is at $1.97 at the time of writing.