Tom Nash
patreon
Undervalued Stock With Big Long-Term Potential
🕑 Added 2023-06-16 08:27:13 +0000 UTCDear Patreons,
Today I want to introduce you to a global building and construction materials leader, which operates in composites, insulation, and roofing. It's based in Toledo, Ohio and was founded back in 1938. Today, it has 20,000 employees and has a presence in 33 countries.
The company is Owens Corning and the ticker symbol is OC.
OC is operating at 14% net income margin, which is double the industry standard. Over the past 3 years the Net Income margin improved by over 300% which is a great sign.
It has a steady 5%-10% growth, with high correlation to the real estate market. Over the past 5 years it grew revenues by 50%.
Trading at 9 PE and 11 FWD PE (Price to Earnings Ratio) and 1.2 Price to Sales, its NOT an expensive stock, despite great numbers.
It has a nice little dividend component of 1.7% FWD yield to go along with great fundamentals.
Short interest is low with under 5% shorts.
10/6 Ratio of assets to liabilities is very solid as well.
As of June 2023, the stock is trading at $122 and according to my DCF valuation this stock is fairly valued at $196 which implies 60% upside for long term investors, plus the dividend component on top.
*DCF model taken from stock-mvp.com
In my opinion, OC has decent revenue growth trajectory, strong margins and a dividend component on top, at a cheap price. With a significant exposure to the U.S. construction market, it should have a very nice couple of years going forward as the FED starts bringing interest rates back down.
*As you may have noticed I use STOCK MVP for my DCF modeling. Its my own platform which I built to solve a problem for retail investors who don't have access to professional valuation tools. If you would like to test it out for free go to https://www.stock-mvp.com and signup for the free 7 day trial.
**Nothing in this article constitutes tax, legal, financial and/or investment advice, nor does any information in this article constitute an invitation and/or solicitation to invest in a particular security. This article merely expresses the authorβs opinion and should be viewed as such. Before proceeding with any investments, you should do your own research and seek advice from an independent licensed professional.
