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Should Value Investors Buy SunCoke Energy (SXC) Stock?

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While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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.

One company value investors might notice is SunCoke Energy (SXC - Free Report) . SXC is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.

We should also highlight that SXC has a P/B ratio of 1.48. 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 1.57. Over the past year, SXC's P/B has been as high as 1.55 and as low as 0.97, with a median of 1.35.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. 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 0.51. This compares to its industry's average P/S of 0.99.

Finally, our model also underscores that SXC has a P/CF ratio of 4.92. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 5.59. Within the past 12 months, SXC's P/CF has been as high as 5.13 and as low as 3.37, with a median of 4.46.

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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