Since the release of its second-quarter results, Suncor Energy's (NYSE: SU) stock has nosedived almost 30%. This, I believe, is a classic case of market sentiments, rather than some fundamental weakness, driving the stock price. Read on and we'll see why.

Hindsight matters
There's no doubt the latest quarter results weren't too impressive. Downtime taken to maintain the company's oil sands operations ate into production, which averaged 243,000 barrels per day, compared with 295,500 bpd during the year-ago quarter. Additionally, divestiture of non-core assets has also played a role in decreased production.

However, this is exactly what I'd call good news. Such divestitures and housekeeping measures reflect management's intentions. Focusing on the long term seems to be the catchphrase here.

Actually, I'm not too surprised. In its 10-year growth strategy, Suncor plans to increase production to more than 1 million barrels of oil equivalent per day by 2020. The company plans an overall production growth of around 8% per year, which includes a 10% annual growth in oil sands production.

The real McCoy
Canada's oil sands have catapulted the nation into third place in terms of proven reserves. In 2009, Alberta's oil sands accounted for 50% of total crude oil produced. Given the rapid pace of development, this figure is only bound to grow. Suncor has strategically partnered with Total E&P Canada, a wholly owned subsidiary of Total (NYSE: TOT), to develop the Fort Hills and Joslyn oil sands, which have the capacity to produce a huge 390,000 bpd.

How is the stock currently valued?
All these factors make me want to take a look at the stock and see how it stacks up against its closest peers:

Company

TEV/EBITDA
(TTM)

P/E
(TTM)

P/B

Suncor Energy 6.3 15.2 1.24

Canadian Natural Resources

(NYSE: CNQ)

7.1 28.1 1.68

Imperial Oil

(NYSE: IMO)

7.6 11.8 2.59

Cenovus Energy

(NYSE: CVE)

10.4 24.9 2.79

Source: Capital IQ, a Standard & Poor's company; TTM= trailing 12 months.

Suncor's multiples look pretty impressive. Currently, it is among the cheapest, both in terms of its total enterprise value and its share price. Also, its price-to-book value is now at its lowest in the last five years.

This is where things look interesting.

Given the company's promising growth plans, its oil sands properties might still be way undervalued. This, coupled with the downward trajectory of its price-to-book value, makes me say that the stock is a huge bargain.

Foolish bottom line
Canada's huge reserves and politically stable environment make it the best bet among the top oil-producing countries. With technological advances and strategic partnerships in place, there's no reason why companies like Suncor shouldn't deliver on their plans. If you'd like to stay up to speed on the top news and analysis on Suncor, add it to My Watchlist.