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Are Investors Undervaluing Oaktree Specialty Lending (OCSL) 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.

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 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.

Oaktree Specialty Lending (OCSL - Free Report) is a stock many investors are watching right now. OCSL is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 10.06, while its industry has an average P/E of 10.28. Over the last 12 months, OCSL's Forward P/E has been as high as 12.91 and as low as 5.58, with a median of 10.25.

Another valuation metric that we should highlight is OCSL's P/B ratio of 0.85. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 1.93. Over the past year, OCSL's P/B has been as high as 0.86 and as low as 0.36, with a median of 0.80.

These are just a handful of the figures considered in Oaktree Specialty Lending'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 OCSL is an impressive value stock right now.


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