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Are Investors Undervaluing Owens Corning (OC) 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.

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 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.

One stock to keep an eye on is Owens Corning (OC - Free Report) . OC is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 11.58. This compares to its industry's average Forward P/E of 17.43. Over the past 52 weeks, OC's Forward P/E has been as high as 17.66 and as low as 11.35, with a median of 14.14.

We also note that OC holds a PEG ratio of 0.74. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. OC's PEG compares to its industry's average PEG of 1.45. OC's PEG has been as high as 4.18 and as low as 0.73, with a median of 1.31, all within the past year.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. 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 1.37. This compares to its industry's average P/S of 1.99.

Finally, investors should note that OC has a P/CF ratio of 8.27. 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 P/CF compares to its industry's average P/CF of 21.20. Over the past year, OC's P/CF has been as high as 9.36 and as low as 6.61, with a median of 8.45.

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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