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Is Omnicom (OMC) a Great Value Stock Right Now?

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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, 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.

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 (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. The stock is trading with P/E ratio of 12.61 right now. For comparison, its industry sports an average P/E of 15.93. OMC's Forward P/E has been as high as 13.18 and as low as 8.05, with a median of 10.86, all within the past year.

We should also highlight that OMC has a P/B ratio of 4.59. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 11.51. Within the past 52 weeks, OMC's P/B has been as high as 4.68 and as low as 3.15, with a median of 4.02.

Finally, we should also recognize that OMC has a P/CF ratio of 14.21. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 16.10. Within the past 12 months, OMC's P/CF has been as high as 14.49 and as low as 6.90, with a median of 10.07.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Omnicom is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, OMC feels like a great value stock at the moment.


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