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Is Owens Corning (OC) a Great Value Stock Right Now?

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.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One company value investors might notice is Owens Corning (OC). OC is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 7.04 right now. For comparison, its industry sports an average P/E of 11.31. Over the past 52 weeks, OC's Forward P/E has been as high as 10.70 and as low as 6.44, with a median of 8.70.

OC is also sporting a PEG ratio of 0.74. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. OC's industry has an average PEG of 1.09 right now. Over the past 52 weeks, OC's PEG has been as high as 1.23 and as low as 0.30, with a median of 0.61.

We should also highlight that OC has a P/B ratio of 1.72. 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 stock's P/B looks attractive against its industry's average P/B of 3. Within the past 52 weeks, OC's P/B has been as high as 2.35 and as low as 1.57, with a median of 2.08.

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 prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. OC has a P/S ratio of 0.85. This compares to its industry's average P/S of 1.06.

Finally, we should also recognize that OC has a P/CF ratio of 4.83. 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. OC's current P/CF looks attractive when compared to its industry's average P/CF of 13.87. OC's P/CF has been as high as 6.89 and as low as 4.39, with a median of 6, all within the past year.

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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