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Is Owens Corning (OC) a Great Value Stock Right Now?

Zacks.com logo Zacks.com 11/17/2020

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.

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 use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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.

Owens Corning (OC) is a stock many investors are watching right now. 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 13.37 right now. For comparison, its industry sports an average P/E of 17.68. Over the past year, OC's Forward P/E has been as high as 19.95 and as low as 6, with a median of 13.28.

We also note that OC holds a PEG ratio of 1.27. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. OC's PEG compares to its industry's average PEG of 1.54. OC's PEG has been as high as 4.73 and as low as 0.57, with a median of 1.76, all within the past year.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's 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 1.13. This compares to its industry's average P/S of 1.52.

Finally, our model also underscores that OC has a P/CF ratio of 8.50. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. OC's current P/CF looks attractive when compared to its industry's average P/CF of 16.63. Over the past 52 weeks, OC's P/CF has been as high as 9.04 and as low as 3.98, with a median of 7.72.

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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