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Should Value Investors Buy SunCoke Energy (SXC) Stock?

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The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find 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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

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 a Value grade of A.

Investors should also recognize that SXC has a P/B ratio of 1.12. 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 attractive against its industry's average P/B of 1.96. Over the past year, SXC's P/B has been as high as 1.51 and as low as 0.84, with a median of 1.06.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. SXC has a P/S ratio of 0.38. This compares to its industry's average P/S of 1.09.

Finally, our model also underscores that SXC has a P/CF ratio of 2.94. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 5.01. Over the past 52 weeks, SXC's P/CF has been as high as 4.61 and as low as 2.20, with a median of 3.35.

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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