Should Value Investors Buy OI Glass (OI) Stock?
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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. 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 company value investors might notice is OI Glass (OI). OI is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 6.81. This compares to its industry's average Forward P/E of 19.45. Over the past 52 weeks, OI's Forward P/E has been as high as 8.56 and as low as 5.66, with a median of 6.72.
Investors will also notice that OI has a PEG ratio of 1.45. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. OI's industry has an average PEG of 4.15 right now. Over the last 12 months, OI's PEG has been as high as 1.47 and as low as 0.30, with a median of 1.10.
Another notable valuation metric for OI is its P/B ratio of 1.77. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 2.18. OI's P/B has been as high as 4.12 and as low as 1.49, with a median of 2.29, over the past year.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. OI has a P/S ratio of 0.35. This compares to its industry's average P/S of 0.56.
Finally, we should also recognize that OI has a P/CF ratio of 2.44. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 7.46. Over the past year, OI's P/CF has been as high as 4.40 and as low as 2.06, with a median of 3.17.
These figures are just a handful of the metrics value investors tend to look at, but they help show that OI Glass is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, OI feels like a great value stock at the moment.
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