Back to top

Image: Bigstock

Are Investors Undervaluing Sunoco LP (SUN) Right Now?

Read MoreHide Full Article

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, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

Sunoco LP (SUN - Free Report) is a stock many investors are watching right now. SUN is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 9.31 right now. For comparison, its industry sports an average P/E of 13.90. Over the past year, SUN's Forward P/E has been as high as 9.73 and as low as 7.12, with a median of 8.16.

Finally, our model also underscores that SUN has a P/CF ratio of 5.06. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. SUN's current P/CF looks attractive when compared to its industry's average P/CF of 9. SUN's P/CF has been as high as 6.79 and as low as 3.88, with a median of 4.64, all within the past year.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Sunoco LP is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, SUN feels like a great value stock at the moment.


In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


Sunoco LP (SUN) - free report >>

Published in