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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Owens Corning (XNYS:OC) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
OC
Name:
OWENS CORNING (XNYS:OC)
Sector:
51.00M
Industry:
Building Products & Equipment
CEO:
Mr. Brian Chambers
Total Employees:
20,000
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -143.03% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF OWENS CORNING(OC) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND BUILDING PRODUCTS & EQUIPMENT INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
80.92
One Month Price Target:
$81.61
Six Month Price Target :
$85.08
Likely Price in One Year's Time:
Ticker:
$89.23
Likely Trading Range Today Under (Normal Volatility)
$80.59
Price Upper limit ($) :
$81.36
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$76.3
This week:
$70.59
This month :
$60.26
Other Primary facts
Market Cap:
7.78B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
96.24M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
14.14%
-18.47%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$102.35
$92.48
$59.49
$69.36
Medium risk (<10%) entry points
Buy Call
Sell Call
$89.26
Buy Put:
Sell Put:
$87.16
$72.55
$74.68
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
OC
Sharpe Ratio:
2.23%
Comparison:
OC, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is -10.57% lower than the industry
& is -2.22% lower than the market/S&P 500 average
Average Returns/Yield of
OC
Daily returns:
0.07%
Weekly returns:
0.36%
Monthly returns:
1.43%
Yearly returns:
21.19%
Comparison of returns:
Average annual returns/yield (last 3 years) is -18.93% below industry average
Classification:
OC, is amongst the top 40% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.45
Statistical test of Returns:
OC has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.81%
Weekly Volatility:
6.29%
Monthly Volatility:
12.58%
Yearly Volatility:
43.59%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.91%
Volatility in last five trading days has been -67.59% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-5.71%
Weekly VaR:
-12.76%
Monthly VaR:
-25.53%
How Much Can the price of
OC
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-22%
Worst case (decline):
-88.42%
This translates to price declining to:
$63.32
This translates to price declining to:
$9.37
Severe Crash Probability
Risk of crash in next 6/12 months: High (50-70%)
What is Value at Risk (VaR)?
Risk Fundamentals
OC is a 80.16% riskier investment compared to the market/S&P 500 & is 54.34% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -8.88% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
OC
Beta in relation to market/S&P 500--1.53
Expected beta in 1 year's time:
1.559
Expected beta in 3 year's time:
2.205
Unlevered (debt free) Beta:
0.998
Beta in relation to Nasdaq (XNAS):
1.009
Beta in relation to all global stocks::
0.929
Beta Comparison & Analysis
Beta of competitors/peers::
1.324
Beta is 15.45% higher than peers
Average Industry Beta:
1.393
Beta is 9.79% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
21.00%
Sustainable growth rate is -36.44% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.036
Alpha is -58.20% below industry average alpha yield
Alpha is 226% higher than market/& is unsustainably high
Analysis of Cost of Capital of
OC
Equity cost of capital:
0.136
Equity cost of capital is 7.36% above industry mean WACC
Unlevered (without debt) cost of capital:
8.89%
Before-tax cost of debt:
3.85%
After-tax cost of debt:
3.04%
Overall debt rating:
Lower BB medium grade (Fifth highest grade)
Weighted average cost of capital (WACC):
3.04%
WACC is 2.25% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$92.78
Revenue growth rate per share of (3Y):
1.78
Annual revenue growth rate is -18.89% below industry average
EPS:
$10.60
Expected Annual growth rate of EPS (3Y):
37.00%
Expected future EPS growth rate is 352.29% higher than the Building Products & Equipment industry
Free cash flow (FCF) per share:
$9.81
Balance sheet equity growth per share: 25.22%
Equity growth rate per share is -49.24% lower than the industry
Debt per share
$32.11
EBITDA per share
$21.74
Valuation Analysis Today of
OC
P/E Ratio:
7.19
P/E Ratio of Competitors/Peers:
36.21
P/E ratio is -80.15% lower than main peers & is -73.10% lower than the industry
Stock price/value with industry average P/E ratio: $283.27
OC is -71.43% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $45.78
Present value of the expected future dividends only: $15.24
P/S (Price to Sales ratio):
0.87
Price to sales ratio is -69.32% below the industry mean
P/B (Price to book value ratio):
1.78
Price to free cash flow: 8.25
-
Net income growth rate (3Y):
94.74%
Net income growth rate is 11.55% higher than the average industry net income growth rate
Dividend Analysis
Dividend payout rate: 3.21%
Dividend yeild: 1.51%
Previous Dividend: $0.35
Previous adjusted dividend: $0.35
Previous Dividend: $1.22
Expected next dividend best case: $0.39
Expected next dividend worst case: $0.31
Average dividend payment (long-term): $0.27
Average dividend increase/decrease (growth rate) % per period: 5.20%
Expected next dividend payment date: 07/06/2022
Expected next dividend record date: 06/02/2022
Expected next dividend declaration date: 05/04/2022
Previous dividend payment date: 04/07/2022
Previous dividend record date: 03/04/2022
Previous dividend declaration date: 02/03/2022
Dividend History:
2022-03-03--$0.35
2021-10-21--$0.26
2021-03-04--$0.26
2022-01-06--$0.35
2021-07-15--$0.26
2021-01-07--$0.26
Dividend growth rate is -72.68% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
71.18%
Net debt to equity ratio:
55.15%
Debt to assets ratio:
29.95%
Net debt to assets ratio:
23.21%
Debt-to-asset ratio is -36.89% below industry average
Ability to repay debt:
Interest coverage ratio:
17.29
Interest coverage ratio is -95.88% less than industry average
Looking forward:
Debt growth rate:
-4.94%
Annual debt growth is -182% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.16%
Analysis of Key Statistics
Correlation of price movement with the market:
0.73
Statistical significance of correlation:
OC has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.604
Stock price is 20.80% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.604
Correlation of price movement with Nasdaq (^IXIC):
0.015
Covariance of price movement with the market:
0.024
Kurtosis
5.272
Returns have moderate fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
-0.355
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
OC
Gross Profit Margin Ratio:
107%
Operating Profit Margin Ratio:
17.70%
Operating profit margin is -150.58% lower than the industry
Net Profit Margin Ratio:
107%
Effective Tax Rate:
25.15%
Effective tax rate is 14.85% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
25.09%
Return on equity (ROE) is 12.86% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
10.56%
Return on assets (ROA) is -0.61% lower than the industry
Financial Leverage:
1.4x
Current Ratio:
1.72
Current ratio is -41.99% below industry average
Cash Conversion Cycle (days):
-48.2
Cash conversion cycle is -246.50% below industry average
The remaining useful life of property plant & equipment is: 5.0 years
Stock based compensation to net income ratio:
1.10%
In-depth Efficiency Analysis
Revenue generated per employee:
446.5K
Each employee generates -25% less revenue than industry average revenue per employee
EBITDA generated per employee:
104.6K
Each employee generates -18% less EBITDA than industry average revenue per employee
Profit generated per employee:
54.5K
Each employee generates -31% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
2.6K
Each employee generates -73% less free cash flow than industry average revenue per employee
Assets/Capital per employee
344.3K
Each employee generates -73% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 10.98%
Growth rate in R&D investment/expenditure is -77.91% lower than the industry
Competitors/Peer firms of
OC
ADVANCED DRAINAGE SYSTEMS, INC. (XNYS:WMS)
AGCO CORPORATION (XNYS:AGCO)
SITEONE LANDSCAPE SUPPLY, INC. (XNYS:SITE)
TFI International Inc. (XNYS:TFII)
GXO LOGISTICS, INC. (XNYS:GXO)
DUN & BRADSTREET HOLDINGS, INC. (XNYS:DNB)
Vertiv Holdings Co (XNYS:VRT)
DTE ENERGY UNT (XNYS:DTP)
KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC. (XNYS:KNX)
Current Analyst Ratings
Strong buy�33%
Buy�29%
Hold�33%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Strong buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
8.93B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
6.54B
2.39B
94.00M
-
767.00M
-
- 49000.00K
812.00M
-
121.00M
515.00M
2.09B
1.58B
1.09B
1.46B
367.00M
1.09B
Statement of Cash Flow
Date:
Period:
132.00M
Differed Income Tax :
3.00M
Stock Based Compensation :
12.00M
Change in Working Capital :
- 301000.00K
Accounts Receivables:
-
Other Working Capital:
- 301000.00K
Other Non-Cash Items:
5.00M
Net Cash Provided by Operating Activities:
158.00M
Investments in PP&E:
- 107000.00K
Net Acquisitions:
-
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
748.00M
-
748.00M
1.40B
1.15B
141.00M
3.43B
4.01B
983.00M
1.61B
-
30.00M
259.00M
6.89B
-
10.32B
1.33B
52.00M
-
-
619.00M
2.00B
3.09B
486.00M
3.95B
-
5.95B
1.00M
2.97B
- 581000.0K
1.95B
March 31, 2022 at 6:00:00 AM
7.35B
4.34B
10.29B
-
3.14B
2.4B
11.00M
8.00M
- 88000.00K
- 5000.00K
-
- 229000.00K
- 35000.00K
- 16000.00K
- 285000.00K
4.00M
- 211000.00K
755.00M
966.00M
158.00M
- 107000.00K
51.00M
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
OC
2023
2024
2025
2026
2027
$89.68
$235.26
$259.43
$286.09
$315.49