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Are Investors Undervaluing Sunoco LP (SUN) Right Now?
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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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One company value investors might notice is Sunoco LP (SUN - Free Report) . SUN is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 10.48, while its industry has an average P/E of 15.33. Over the past year, SUN's Forward P/E has been as high as 38.42 and as low as 9.61, with a median of 11.80.
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 prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. SUN has a P/S ratio of 0.16. This compares to its industry's average P/S of 0.22.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Sunoco LP 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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Are Investors Undervaluing Sunoco LP (SUN) Right Now?
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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One company value investors might notice is Sunoco LP (SUN - Free Report) . SUN is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 10.48, while its industry has an average P/E of 15.33. Over the past year, SUN's Forward P/E has been as high as 38.42 and as low as 9.61, with a median of 11.80.
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 prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. SUN has a P/S ratio of 0.16. This compares to its industry's average P/S of 0.22.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Sunoco LP 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.