Should Value Investors Buy SunCoke Energy (SXC) Stock?
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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. 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 company to watch right now is SunCoke Energy (SXC). SXC is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.
Another notable valuation metric for SXC is its P/B ratio of 1.26. 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 company's current P/B looks solid when compared to its industry's average P/B of 1.50. Over the past year, SXC's P/B has been as high as 1.38 and as low as 0.79, with a median of 1.15.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. SXC has a P/S ratio of 0.4. This compares to its industry's average P/S of 0.84.
Value investors will likely look at more than just these metrics, but the above data helps show that SunCoke Energy is likely undervalued currently. And when considering the strength of its earnings outlook, SXC sticks out at as one of the market's strongest value stocks.
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SunCoke Energy, Inc. (SXC) : Free Stock Analysis Report
