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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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 (SUN) is a stock many investors are watching right now. SUN is currently holding a Zacks Rank #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 7.87, which compares to its industry's average of 13.97. Over the last 12 months, SUN's Forward P/E has been as high as 8.64 and as low as 4.63, with a median of 7.26.
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. SUN has a P/S ratio of 0.39. This compares to its industry's average P/S of 0.75.
Finally, we should also recognize that SUN has a P/CF ratio of 6.61. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 10.57. Over the past 52 weeks, SUN's P/CF has been as high as 8.56 and as low as 5.14, with a median of 6.38.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Sunoco 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.
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