Should Value Investors Buy Owens & Minor (OMI) Stock?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
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.
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). OMI is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 13.12, which compares to its industry's average of 28.07. Over the past 52 weeks, OMI's Forward P/E has been as high as 24.77 and as low as 6.91, with a median of 9.76.
Another valuation metric that we should highlight is OMI's P/B ratio of 2.69. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. OMI's current P/B looks attractive when compared to its industry's average P/B of 2.85. OMI's P/B has been as high as 2.72 and as low as 0.56, with a median of 0.91, over the past year.
These are just a handful of the figures considered in Owens & Minor'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 OMI is an impressive value stock right now.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.