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Are Investors Undervaluing Orion Engineered Carbons (OEC) Right Now?

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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.

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.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

Orion Engineered Carbons (OEC) is a stock many investors are watching right now. OEC is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 6.11 right now. For comparison, its industry sports an average P/E of 9.75. Over the last 12 months, OEC's Forward P/E has been as high as 9.86 and as low as 5.64, with a median of 7.94.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. OEC has a P/S ratio of 0.55. This compares to its industry's average P/S of 0.74.

Finally, we should also recognize that OEC has a P/CF ratio of 3.65. 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 company's current P/CF looks solid when compared to its industry's average P/CF of 6.36. Over the past 52 weeks, OEC's P/CF has been as high as 9.25 and as low as 3.37, with a median of 4.52.

Investors could also keep in mind Olin (OLN), an Chemical - Diversified stock with a Zacks Rank of # 2 (Buy) and Value grade of A.

Olin is trading at a forward earnings multiple of 4.77 at the moment, with a PEG ratio of 0.11. This compares to its industry's average P/E of 9.75 and average PEG ratio of 0.61.

OLN's price-to-earnings ratio has been as high as 8.52 and as low as 4.55, with a median of 6.46, while its PEG ratio has been as high as 0.15 and as low as 0.10, with a median of 0.13, all within the past year.

Additionally, Olin has a P/B ratio of 2.59 while its industry's price-to-book ratio sits at 2.02. For OLN, this valuation metric has been as high as 4.38, as low as 2.47, with a median of 3.42 over the past year.

These are just a handful of the figures considered in Orion Engineered Carbons and Olin'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 OEC and OLN is an impressive value stock right now.


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