Bull’s Eye Report: Owens Corning (OC)

Buy OC at current levels for immediate upside to ~$44

   

At StateoftheMarkets.com, we strive to “own the best and ignore the rest” in our equity portfolios. Toward this end, each day we search our database for a “top stock” (a top rated company in terms of earnings strength as well as company and industry performance) that presents a strong technical “set up” and a good entry point.

In short, when our equity team is looking to add a stock to one of our portfolios, the “bull’s eye” stock shown below is generally their first choice.

Company Symbol Industry Stock Rating YTD% Gain S.T.
Stop Loss
Owens Corning OC Building Products 9.8 +4.77% $39.32

Why We Like The Stock:

Owens Corning (NYSE:OC) is our most compelling buy today due to the fact that it is a top rated stock (in terms of earnings strength and company/industry performance) with a positive technical set-up. Building Products have been a strong sub-industry for quite some time, as evidenced by strength in OC’s competitors, Lennox Intl. (NYSE:LII), USG Corp. (NYSE:USG), and A.O. Smith Corp. (NYSE:AOS). OC, however, encountered a sizable pullback in mid-February as the market experienced a couple weeks of heightened volatility. Since the pullback, it has based and started uptrending again, recently crossing back over its short-term moving averages. OC has an immediate upside to ~$44 near its mid-February highs, which is about a +7.3% upside in the short-term. Any time we can get a good entry point in a sub-industry that is clearly “working,” we will take it. A tight stop at $39.32 limits the downside to a short-term trade, so we think OC is a good bet at current prices.

We Would Be Buyers:

At the current price (~$41.00), or on a pullback to the 5-day moving average (~$39.93).

Company Profile:

Owens Corning is engaged in composite and building materials systems, delivering a range of products and services. The Company’s products range from glass fiber used to reinforce composite materials for transportation, electronics, marine, infrastructure, wind-energy and other markets to insulation and roofing for residential, commercial and industrial applications. The Company operates in two segments: Composites, which includes its reinforcements and downstream businesses, and Building Materials, which includes its insulation and roofing businesses. On July 31, 2011, the Company completed the acquisitions of FiberTEK Insulation West, LLC. On May 18, 2011, the Company sold its Composites glass reinforcements facility in Capivari, Brazil to Chongqing Polycomp International Company (CPIC), an unrelated third party.

Stock Rating: 9.8

The Stock Rating indicates the combined score of our proprietary Earning Strength and Company Performance models. The rating scale is 0 – 10 with 10 being the highest.

Owens Corning – Last Three Months

OC 1 300x168 Bulls Eye Report: Owens Corning (OC)
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Owens Corning – Last 12 Months

OC 2 300x168 Bulls Eye Report: Owens Corning (OC)
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Owens Corning – Last Five Years

OC 3 300x168 Bulls Eye Report: Owens Corning (OC)
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At the time of publication the editor and affiliated companies own the following positions: None

Note: Positions may be bought or sold while this publication is in circulation without notice.


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