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Should Value Investors Buy Owens & Minor (OMI) 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, 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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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 stock to keep an eye on is Owens & Minor (OMI - Free Report) . OMI is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 12.64 right now. For comparison, its industry sports an average P/E of 27.33. OMI's Forward P/E has been as high as 15.74 and as low as 3.82, with a median of 8.24, all within the past year.

We also note that OMI holds a PEG ratio of 1.59. 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. OMI's industry has an average PEG of 2.54 right now. Over the past 52 weeks, OMI's PEG has been as high as 3.44 and as low as 0.90, with a median of 1.35.

Finally, investors should note that OMI has a P/CF ratio of 5.19. 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. OMI's P/CF compares to its industry's average P/CF of 20.54. OMI's P/CF has been as high as 6.36 and as low as 1.42, with a median of 3.53, all within the past year.

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


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