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Is Omnicom Group (OMC) Stock Undervalued Right Now?

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While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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 Omnicom Group (OMC - Free Report) . OMC is currently sporting a Zacks Rank #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 8.41 right now. For comparison, its industry sports an average P/E of 10.55. Over the last 12 months, OMC's Forward P/E has been as high as 12.75 and as low as 8.00, with a median of 9.65.

We also note that OMC holds a PEG ratio of 1.42. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. OMC's PEG compares to its industry's average PEG of 1.44. Over the last 12 months, OMC's PEG has been as high as 2.34 and as low as 1.35, with a median of 1.82.

Finally, investors should note that OMC has a P/CF ratio of 9.11. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 11.90. Over the past year, OMC's P/CF has been as high as 12.32 and as low as 8.13, with a median of 9.45.

These are only a few of the key metrics included in Omnicom Group'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, OMC looks like an impressive value stock at the moment.


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