Owens Corning Stock Candle Over Candle Off 50 SMA

Owens Corning stock has confirmed a candle over candle reversal off its 50 SMA line. I have taken a swing long entry in Owens Corning in my personal trading account.

Owens Corning last issued its earnings report on July 26, 2017. The residential and commercial building materials company reported $1.20 EPS for the quarter which beat the consensus estimate of $1.08. Revenue also beat coming in at $1.60 billion versus the $1.48 billion estimate. You can read more about the company here.

Analysts are Bullish On Owens Corning Stock

Royal Bank Of Canada reiterated its outperform rating and set a price target of $71 (up from $67) on April 27, 2017. Jefferies Group raised its price target on Owens Corning stock from $71 to $72 and gave the stock a buy rating on April 28, 2017. Stifel Nicolaus raised its price target $72 and gave the stock a buy rating on May 1, 2017. Instinet reiterated a buy rating and set a price target of $74 on June 1, 2017. Overall, one analyst has rated the stock with a sell rating, six have issued a hold rating and sixteen have given a buy rating.

Owens Corning Stock Chart

Owens Corning stock chart

There’s a good looking candle over candle bounce off the 50 SMA line. Large players volume has been rising while the stock has dropped which is a bullish signal. The Twiggs Money Flow is negative but its rounding up.

Prices have been consolidating lately and the volatility has been reduced forming a Momentum Squeeze.

A pullback has taken place which may present a good opportunity for an entry. There is a resistance zone just above the current price starting at $67.4. Right above this resistance zone may be a good entry point. There is a support zone below the current price at $66.5, a stop order could be placed below this zone.

Make sure to review this lesson on finding good stocks to buy.

Owens Corning Stock Review
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Summary

Profitability

Owens Corning has a Profit Margin of 6.61%. This is better than the industry average of 6.17%. Owens Corning's Return On Asserts of 4.55% is inline with the rest of the industry. Owens Corning has a Return On Equity of 9.84%. This is below the industry average of 164.45%. Nearly all of OC's industry peers outperform OC on Return On Equity.

Valuation

With a Price/Earnings Ratio of 19.45, OC is on the expensive side. The Forward Price/Earnings Ratio of 15.77 indicates a correct valuation of OC. The PEG Ratio, which compensates the Price/Earnings for growth, indicates a correct valuation of the company. With a price book ratio of 1.87, OC is valued correctly.

Growth

Based on estimates for the next 2 years, OC will show a strong growth in Earnings Per Share. The EPS will grow by 16.20% on average per year. The EPS growth is accelerating: in the next 2 years the growth will be better than in the last year. The earnings per share for OC have decreased by -2.25% in the last year. The Revenue has been growing slightly by 2.93% on average over the past 5 years.

Health

OC has a Current Ratio of 1.78. This is a normal value and indicates that OC is financially healthy and should not expect problems in meeting its short term obligations. OC has a Quick Ratio of 1.07. This is a normal value and indicates that OC is financially healthy and should not expect problems in meeting its short term obligations. OC has an Altman-Z score of 2.19. This is not the best score and indicates that OC is in the grey zone with still only limited risk for bankruptcy at the moment. The Altman-Z score is inline with the industry averages, which is at 2.19. Compared to an average industry Current Ratio of 3.55, OC is worse placed to pay its short term obligations than its industry peers. Compared to an average industry Quick Ratio of 1.57, OC is worse placed to pay its short term obligations than its industry peers. When comparing the Debt to Equity Ratio of OC to the average industry Debt to Equity Ratio of 0.67, OC requires more debt to finance its operations than its industry peers.

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Lance Jepsen

For ethical purposes, I try not to hold any position in any stock I profile on GuerillaStockTrading.com unless specifically stated in the article. Owner of GuerillaStockTrading.com. Seasoned entrepreneur, investor, and writer. I love God, family, country, stock trading, economics, and helping people learn how to trade.
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Author: Lance Jepsen

For ethical purposes, I try not to hold any position in any stock I profile on GuerillaStockTrading.com unless specifically stated in the article. Owner of GuerillaStockTrading.com. Seasoned entrepreneur, investor, and writer. I love God, family, country, stock trading, economics, and helping people learn how to trade.

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