Is Omnicom Group (OMC) a Great Value Stock 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.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One stock to keep an eye on is Omnicom Group (OMC). OMC is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 11.21 right now. For comparison, its industry sports an average P/E of 12.59. Over the last 12 months, OMC's Forward P/E has been as high as 13.48 and as low as 10.24, with a median of 11.63.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. OMC has a P/S ratio of 1.06. This compares to its industry's average P/S of 1.42.
Finally, investors should note that OMC has a P/CF ratio of 9.89. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. OMC's P/CF compares to its industry's average P/CF of 26.99. Over the past 52 weeks, OMC's P/CF has been as high as 15.50 and as low as 9.02, with a median of 11.40.
These are only a few of the key metrics included in Omnicom Group's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, OMC looks like an impressive value stock at the moment.
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