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Should Value Investors Buy Owens Corning (OC) Stock?

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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.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One stock to keep an eye on is Owens Corning (OC - Free Report) . OC is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock holds a P/E ratio of 9.92, while its industry has an average P/E of 13.60. Over the last 12 months, OC's Forward P/E has been as high as 12.28 and as low as 6.49, with a median of 9.60.

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. OC has a P/S ratio of 1.25. This compares to its industry's average P/S of 1.47.

Finally, we should also recognize that OC has a P/CF ratio of 6.36. 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 stock's P/CF looks attractive against its industry's average P/CF of 17.86. Within the past 12 months, OC's P/CF has been as high as 6.64 and as low as 4.07, with a median of 4.83.

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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