Are Investors Undervaluing Owens Corning (OC) Right Now?
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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One stock to keep an eye on is Owens Corning (OC). OC is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock is trading with a P/E ratio of 10.45, which compares to its industry's average of 14.79. Over the past year, OC's Forward P/E has been as high as 12.28 and as low as 6.49, with a median of 9.42.
OC is also sporting a PEG ratio of 1.33. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. OC's PEG compares to its industry's average PEG of 1.43. Within the past year, OC's PEG has been as high as 2.14 and as low as 0.61, with a median of 0.90.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. OC has a P/S ratio of 1.31. This compares to its industry's average P/S of 1.59.
Finally, our model also underscores that OC has a P/CF ratio of 6.60. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 15.13. OC's P/CF has been as high as 6.64 and as low as 4.07, with a median of 4.83, all within the past year.
PGT Innovations (PGTI) may be another strong Building Products - Miscellaneous stock to add to your shortlist. PGTI is a # 2 (Buy) stock with a Value grade of A.
PGT Innovations also has a P/B ratio of 2.50 compared to its industry's price-to-book ratio of 104.81. Over the past year, its P/B ratio has been as high as 2.76, as low as 1.70, with a median of 2.17.
These are only a few of the key metrics included in Owens Corning and PGT Innovations strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, OC and PGTI look like an impressive value stock at the moment.
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Owens Corning Inc (OC) : Free Stock Analysis Report
PGT, Inc. (PGTI) : Free Stock Analysis Report
