Should Value Investors Buy Owens Corning (OC) Stock?
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.
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.
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 Corning (OC). OC is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 14.08. This compares to its industry's average Forward P/E of 20.10. OC's Forward P/E has been as high as 19.95 and as low as 7.83, with a median of 14.41, all within the past year.
We also note that OC holds a PEG ratio of 1. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. OC's industry currently sports an average PEG of 1.75. Over the past 52 weeks, OC's PEG has been as high as 4.73 and as low as 0.83, with a median of 1.39.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's 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 1.44. This compares to its industry's average P/S of 2.12.
Finally, our model also underscores that OC has a P/CF ratio of 9.42. 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. OC's P/CF compares to its industry's average P/CF of 16.63. Over the past 52 weeks, OC's P/CF has been as high as 9.63 and as low as 4.44, with a median of 8.26.
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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