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, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company value investors might notice is SunCoke Energy (SXC). SXC is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A.
Another notable valuation metric for SXC is its P/B ratio of 1.24. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 1.67. Over the past 12 months, SXC's P/B has been as high as 1.51 and as low as 0.79, with a median of 1.13.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. SXC has a P/S ratio of 0.42. This compares to its industry's average P/S of 0.98.
Finally, investors should note that SXC has a P/CF ratio of 3.17. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 3.24. Over the past year, SXC's P/CF has been as high as 4.61 and as low as 2.02, with a median of 3.
Another great Coal stock you could consider is Yanzhou Coal Mining (YZCAY), which is a # 2 (Buy) stock with a Value Score of A.
Yanzhou Coal Mining also has a P/B ratio of 1.05 compared to its industry's price-to-book ratio of 1.67. Over the past year, its P/B ratio has been as high as 1.24, as low as 0.71, with a median of 0.96.
These are only a few of the key metrics included in SunCoke Energy and Yanzhou Coal Mining strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, SXC and YZCAY look like an impressive value stock at the moment.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report