SunCoke Energy Inc Stock Upgraded (SXC)

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

NEW YORK ( TheStreet) -- SunCoke Energy (NYSE: SXC) has been upgraded by TheStreet Ratings from hold to buy. Among the primary strengths of the company is its solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

  • EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass.

Highlights from the ratings report include:
  • SXC, with its decline in revenue, underperformed when compared the industry average of 2.3%. Since the same quarter one year prior, revenues fell by 18.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • SUNCOKE ENERGY INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, SUNCOKE ENERGY INC reported lower earnings of $0.36 versus $1.40 in the prior year. This year, the market expects an improvement in earnings ($0.46 versus $0.36).
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • The debt-to-equity ratio of 1.24 is relatively high when compared with the industry average, suggesting a need for better debt level management. Even though the debt-to-equity ratio is weak, SXC's quick ratio is somewhat strong at 1.17, demonstrating the ability to handle short-term liquidity needs.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Metals & Mining industry and the overall market on the basis of return on equity, SUNCOKE ENERGY INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.

SunCoke Energy, Inc. engages in mining and producing coke in the Americas. It offers metallurgical and thermal coal for steel making processes. The company was incorporated in 2010 and is headquartered in Lisle, Illinois. As of July 21, 2011, SunCoke Energy, Inc. SunCoke Energy has a market cap of $1.46 billion and is part of the basic materials sector and metals & mining industry. Shares are down 4.3% year to date as of the close of trading on Wednesday.

You can view the full SunCoke Energy Ratings Report or get investment ideas from our investment research center.

3x UPSIDE POTENTIAL: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.
Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

If you liked this article you might like

SunCoke Energy Doesn't Look Very Sunny

Downgrade, Charts in Agreement on SunCoke Energy

Downgrade, Charts in Agreement on SunCoke Energy

Trader's Daily Notebook: Keeping a Short Leash

United States to Withdraw From the Paris Climate Agreement, Sending Coal Stocks Higher

You've Never Heard of These 5 Stocks but They're Breaking Out