Should Value Investors Buy Owens Corning (OC) Stock?
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
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 use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 10.03, while its industry has an average P/E of 17.22. Over the past year, OC's Forward P/E has been as high as 12.28 and as low as 7.93, with a median of 10.23.
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. OC has a P/S ratio of 1.26. This compares to its industry's average P/S of 1.7.
Finally, we should also recognize that OC has a P/CF ratio of 6.94. 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 company's current P/CF looks solid when compared to its industry's average P/CF of 22.37. Over the past year, OC's P/CF has been as high as 7.79 and as low as 4.41, with a median of 6.20.
These are only a few of the key metrics included in Owens Corning'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, OC looks like an impressive value stock at the moment.
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Owens Corning Inc (OC) : Free Stock Analysis Report
