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, 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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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 Suncor Energy (SU). SU is currently holding a Zacks Rank #2 (Buy) and a Value grade of A.
We should also highlight that SU has a P/B ratio of 1.57. 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 stock's P/B looks solid versus its industry's average P/B of 2.61. Over the past 12 months, SU's P/B has been as high as 1.63 and as low as 1.25, with a median of 1.47.
Finally, investors should note that SU has a P/CF ratio of 5.57. 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 8.76. SU's P/CF has been as high as 5.77 and as low as 4.06, with a median of 4.85, all within the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that Suncor Energy is likely undervalued currently. And when considering the strength of its earnings outlook, SU sticks out as one of the market's strongest value stocks.
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Suncor Energy Inc. (SU): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).