Should Value Investors Buy Omnicom Group (OMC) Stock?

OMC

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.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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.

Omnicom Group (OMC - Free Report) is a stock many investors are watching right now. OMC is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.

Another valuation metric that we should highlight is OMC's P/B ratio of 4.39. 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. OMC's current P/B looks attractive when compared to its industry's average P/B of 5.06. Within the past 52 weeks, OMC's P/B has been as high as 5.32 and as low as 3.79, with a median of 4.32.

Finally, we should also recognize that OMC has a P/CF ratio of 10.75. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 10.98. Over the past year, OMC's P/CF has been as high as 12.41 and as low as 8.98, with a median of 10.75.

These are only a few of the key metrics included in Omnicom Group'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, OMC looks like an impressive value stock at the moment.

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