Seeking Alpha

Credit Suisse names SunCoke Energy among top small-cap picks

  • Credit Suisse’s small-cap strategists add six new stocks to their list of favorites: SunCoke Energy (SXC), RPM international (RPM), Zions Bancorp (ZION), Signature Bank (SBNY), Edwards Lifesciences (EW) and Rexnord (RXN).
  • SXC brings to the table a low cost of capital and proven business model, the firm says in seeing business development opportunities across various industries (including coke making, coal handling and ferrous) which could be worth as much as 3x-4x in annual EBITDA as the company’s current asset base; the firm also cites SXC's low commodity price exposure relative to steel mills and coal miners.
  • SXC also maintains a 55.9% common unit interest and a general partnership interest in SunCoke Energy Partners (SXCP), which allows SXC to benefit disproportionately from the MLP’s growth given their incentive distribution rights.
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