Should Value Investors Buy Owens Corning (OC) 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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. 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.
Owens Corning (OC) is a stock many investors are watching right now. OC is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 10.39, which compares to its industry's average of 13.52. Over the past 52 weeks, OC's Forward P/E has been as high as 12.28 and as low as 6.49, with a median of 9.83.
Another valuation metric that we should highlight is OC's P/B ratio of 2.56. 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. OC's current P/B looks attractive when compared to its industry's average P/B of 3.96. Over the past 12 months, OC's P/B has been as high as 2.62 and as low as 1.58, with a median of 1.90.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. OC has a P/S ratio of 1.29. This compares to its industry's average P/S of 1.43.
Finally, our model also underscores that OC has a P/CF ratio of 6.67. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. OC's current P/CF looks attractive when compared to its industry's average P/CF of 17.53. OC's P/CF has been as high as 6.82 and as low as 4.07, with a median of 4.91, all within the past year.
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
