Should Value Investors Buy SunCoke Energy (SXC) Stock?
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 looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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.
SunCoke Energy (SXC) is a stock many investors are watching right now. SXC is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.
Another valuation metric that we should highlight is SXC's P/B ratio of 1.16. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 1.33. SXC's P/B has been as high as 1.38 and as low as 0.79, with a median of 1.12, over the past year.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. SXC has a P/S ratio of 0.37. This compares to its industry's average P/S of 0.73.
These figures are just a handful of the metrics value investors tend to look at, but they help show that SunCoke Energy is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, SXC feels like a great value stock at the moment.
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SunCoke Energy, Inc. (SXC) : Free Stock Analysis Report
