Yahoo Finance Should Value Investors Buy Sunoco (SUN) 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.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. 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.
One stock to keep an eye on is Sunoco (SUN). SUN is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 11.12, while its industry has an average P/E of 12.75. Over the last 12 months, SUN's Forward P/E has been as high as 16.32 and as low as 9.34, with a median of 12.12.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. SUN has a P/S ratio of 0.23. This compares to its industry's average P/S of 0.3.
Finally, we should also recognize that SUN has a P/CF ratio of 6.75. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. SUN's current P/CF looks attractive when compared to its industry's average P/CF of 7.51. SUN's P/CF has been as high as 9.17 and as low as 5.35, with a median of 6.75, all within the past year.
These are just a handful of the figures considered in Sunoco's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that SUN is an impressive value stock right now.
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Sunoco LP (SUN) : Free Stock Analysis Report
