Are Investors Undervaluing Sunoco LP (SUN) Right Now?
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Neverthe...
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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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.
Sunoco LP (SUN) is a stock many investors are watching right now. SUN is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 8.01, while its industry has an average P/E of 12.40. Over the past 52 weeks, SUN's Forward P/E has been as high as 9.73 and as low as 7.12, with a median of 8.23.
Finally, investors should note that SUN has a P/CF ratio of 4.50. 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. SUN's P/CF compares to its industry's average P/CF of 7.64. Over the past year, SUN's P/CF has been as high as 6.79 and as low as 3.88, with a median of 5.22.
These are only a few of the key metrics included in Sunoco LP'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, SUN looks like an impressive value stock at the moment.
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