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. Nevertheless, we are always paying attention to...
Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. 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 Sunoco LP (SUN). SUN is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock holds a P/E ratio of 9.81, while its industry has an average P/E of 13.48. Over the last 12 months, SUN's Forward P/E has been as high as 9.83 and as low as 7.12, with a median of 8.17.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. SUN has a P/S ratio of 0.26. This compares to its industry's average P/S of 0.33.
Finally, our model also underscores that SUN has a P/CF ratio of 5.01. 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 current P/CF looks attractive when compared to its industry's average P/CF of 8.74. Over the past 52 weeks, SUN's P/CF has been as high as 6.79 and as low as 3.88, with a median of 4.64.
Value investors will likely look at more than just these metrics, but the above data helps show that Sunoco LP is likely undervalued currently. And when considering the strength of its earnings outlook, SUN sticks out at as one of the market's strongest value stocks.
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Sunoco LP (SUN): Free Stock Analysis Report
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