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Is Omnicom Group (OMC) Stock Undervalued Right Now?

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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.

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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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.

One stock to keep an eye on is Omnicom Group (OMC - Free Report) . OMC is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.

Investors should also recognize that OMC has a P/B ratio of 4.60. 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 company's current P/B looks solid when compared to its industry's average P/B of 11.44. Over the past 12 months, OMC's P/B has been as high as 5.32 and as low as 3.79, with a median of 4.62.

Finally, our model also underscores that OMC has a P/CF ratio of 10.89. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. OMC's P/CF compares to its industry's average P/CF of 10.93. Over the past year, OMC's P/CF has been as high as 12.48 and as low as 8.98, with a median of 11.

These are only a few of the key metrics included in Omnicom Group'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, OMC looks like an impressive value stock at the moment.


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