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Should Value Investors Buy Owens & Minor (OMI) Stock?

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While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

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.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One stock to keep an eye on is Owens & Minor (OMI). OMI is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 12.97. This compares to its industry's average Forward P/E of 27.97. Over the last 12 months, OMI's Forward P/E has been as high as 16.14 and as low as 8.74, with a median of 11.91.

Finally, investors should note that OMI has a P/CF ratio of 15.49. 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. This stock's P/CF looks attractive against its industry's average P/CF of 20.66. Within the past 12 months, OMI's P/CF has been as high as 42.36 and as low as 10.29, with a median of 17.46.

Value investors will likely look at more than just these metrics, but the above data helps show that Owens & Minor is likely undervalued currently. And when considering the strength of its earnings outlook, OMI sticks out at as one of the market's strongest value stocks.


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