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Are Investors Undervaluing SunCoke Energy (SXC) Right Now?

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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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One company to watch right now is SunCoke Energy (SXC - Free Report) . SXC is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.

Investors should also recognize that SXC has a P/B ratio of 1.53. The P/B ratio is used to compare a stock's market value with 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 1.74. SXC's P/B has been as high as 1.55 and as low as 0.97, with a median of 1.33, 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 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 0.53. This compares to its industry's average P/S of 1.04.

Finally, investors should note that SXC has a P/CF ratio of 5.06. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. SXC's current P/CF looks attractive when compared to its industry's average P/CF of 6.20. Over the past 52 weeks, SXC's P/CF has been as high as 5.13 and as low as 3.37, with a median of 4.40.

These are only a few of the key metrics included in SunCoke Energy's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, SXC looks like an impressive value stock at the moment.


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