SunCoke Energy Inc. (SXC) operates as an independent producer of coke in the Americas. It offers metallurgical and thermal coal. The company also provides handling and/or mixing services to steel, coke, electric utility, coal producing, and other manufacturing-based customers.
The company has been benefiting from increased global demand for steel. It specializes in cokemaking, which is the process of heating coal to very high temperatures to produce a solid carbonaceous residue. Cokemaking is key in the production of steel. Since there is a tight supply of steel, SXC benefits.
While the company only has $55 million in cash as of the end of the most recent quarter, that still compares favorably to no short-term debt. Earnings have grown 82.4% over the past year and are expected to soar 344% year over year in the current quarter. This has led to a Growth Grade of A in our POWR Ratings system.
In addition, the stock looks undervalued with a forward P/E of only 11.26. SXC has shown mixed performance since February. This is evident in the chart below.
Take a look at the 1-year chart of SXC below with added notations:
Chart of SXC provided by TradingView
SXC has formed a level of support at $6 (green) over the past several months. The stock has rallied off that $6 area a few times already, but now looks like it may be falling back down to that level again.
If SXC were to break support, lower prices will likely follow from there. Therefore, if the stock were to break below the support, a short position could be entered.
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SXC shares were unchanged in premarket trading Tuesday. Year-to-date, SXC has gained 54.48%, versus a 26.26% rise in the benchmark S&P 500 index during the same period.
About the Author: Christian Tharp
I am an expert stock market coach having helped over 4000 beginner and advanced traders & investors from around the world take control of their financial futures. I also write stock market related articles for the Adam Mesh Trading Group and Yolo Publishing. More...
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