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Are Investors Undervaluing Orion Engineered Carbons (OEC) Right Now?

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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.

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.

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.

One company to watch right now is Orion Engineered Carbons (OEC - Free Report) . OEC is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 10.85. This compares to its industry's average Forward P/E of 17.31. Over the past year, OEC's Forward P/E has been as high as 15.94 and as low as 4.20, with a median of 10.42.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. OEC has a P/S ratio of 0.63. This compares to its industry's average P/S of 0.9.

Finally, investors should note that OEC has a P/CF ratio of 5.54. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 11.73. Within the past 12 months, OEC's P/CF has been as high as 6.78 and as low as 2.11, with a median of 5.33.

These are just a handful of the figures considered in Orion Engineered Carbons'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 OEC is an impressive value stock right now.


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