Should Value Investors Buy Owens Corning (OC) Stock?
The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find 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.
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.
One company value investors might notice is Owens Corning (OC). OC is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 10.70 right now. For comparison, its industry sports an average P/E of 16.72. Over the last 12 months, OC's Forward P/E has been as high as 12.28 and as low as 6.74, with a median of 10.04.
OC is also sporting a PEG ratio of 1.05. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. OC's PEG compares to its industry's average PEG of 1.42. Over the past 52 weeks, OC's PEG has been as high as 2.14 and as low as 0.61, with a median of 1.34.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. 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 1.37. This compares to its industry's average P/S of 1.61.
Finally, we should also recognize that OC has a P/CF ratio of 7.24. 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 21.18. Over the past year, OC's P/CF has been as high as 7.46 and as low as 4.30, with a median of 5.78.
These are just a handful of the figures considered in Owens Corning'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 OC is an impressive value stock right now.
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Owens Corning Inc (OC) : Free Stock Analysis Report
