Back to top

Image: Bigstock

Is Sunoco (SUN) a Great Value Stock Right Now?

Read MoreHide Full Article

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.

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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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 - Free Report) is a stock many investors are watching right now. SUN is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 10.42. This compares to its industry's average Forward P/E of 12.31. SUN's Forward P/E has been as high as 16.32 and as low as 9.60, with a median of 12.12, all within the past year.

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 0.23. This compares to its industry's average P/S of 0.31.

Finally, our model also underscores that SUN has a P/CF ratio of 6.36. 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 7.41. Over the past 52 weeks, SUN's P/CF has been as high as 9.17 and as low as 5.35, with a median of 6.75.

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.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Sunoco LP (SUN) - free report >>

Published in