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Should Value Investors Buy Omnicom Group (OMC) Stock?

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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 use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

Omnicom Group (OMC) is a stock many investors are watching right now. OMC is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.

Another notable valuation metric for OMC is its P/B ratio of 4.73. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 14. Over the past year, OMC's P/B has been as high as 5.08 and as low as 3.77, with a median of 4.31.

Finally, investors will want to recognize that OMC has a P/CF ratio of 11.11. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 16.86. Within the past 12 months, OMC's P/CF has been as high as 15.50 and as low as 9.02, with a median of 10.40.

These are just a handful of the figures considered in Omnicom Group's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that OMC is an impressive value stock right now.


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