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Should Value Investors Buy Omnicom Group (OMC) Stock?

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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 use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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.

One company value investors might notice is Omnicom Group (OMC - Free Report) . OMC is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.

Another valuation metric that we should highlight is OMC's P/B ratio of 4.49. Investors use the P/B ratio to look at a stock's market value versus 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 5.35. Over the past year, OMC's P/B has been as high as 5.32 and as low as 3.79, with a median of 4.32.

Finally, investors should note that OMC has a P/CF ratio of 10.99. 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. OMC's current P/CF looks attractive when compared to its industry's average P/CF of 11.46. OMC's P/CF has been as high as 12.41 and as low as 8.98, with a median of 10.75, all within the past year.

These are just a handful of the figures considered in Omnicom Group'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 OMC is an impressive value stock right now.


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