Talk about bad karma! Owens Corning (OC) emerged from bankruptcy in 2006 only to see the housing market enter the worst tailspin in its history.

As a testimonial to the company’s endurance, however, Owens is continuing to generate profits at a time when home building product suppliers are struggling to survive.

Currently trading at a price to earnings ratio over 13, OC is retaining at least a hold recommendation status from analysts covering the company. The consensus of the analysts is for the company to trade at a price equal to over 17 times earnings for 2009.

Looking Forward

The company stands to benefit from the Obama administration push for energy efficiency in home construction. As the foremost provider of home and business insulation solutions, Owens can be expected to see demand for its products grow.

During the past year as home building declined substantially, Owens Corning benefited from home owners opting to remodel their current residence rather than move to a new home. The company also saw strong activity in its asphalt and roofing areas, which helped to maintain positive earnings for the year.

With home building expected to decline by an additional 30% in 2009 and home remodeling also projected to have a high single digit decline, companies such as Owens Corning will continue to have difficulty generating positive earnings. For Owens, however, the diversity of its business lines and effective cost management appear likely to produce positive earnings for the year.

OC stock price however is unlikely to show much if any appreciation during the year, as company growth is likely to remain stagnant. Analysts as a result will retain the stock as a hold for the foreseeable future.

Attractive Bonds

Owens Corning outstanding bonds, however, may provide an investment opportunity for those investors wanting to retain exposure to the home building product industry sector.

Rated BBB- by Standards and Poor’s and Ba1 by Moody’s, Owens Corning bonds are among the most actively traded bonds in the market. The company’s bonds maturing in 2016 carry a coupon of 6.5%. Trading currently at a price of $73.50, the bond generates a yield to maturity of over 11.75%.

An investor looking for a longer term bond can purchase Owen Corning 7% coupon bonds maturing in 2036 at a price of just over $70. At this price, the bond produces a yield of 10.25%.

Owens Corning is financially strong, with a current ratio of over 1.5 and a long term debt to equity ratio of .67. Company bond priced at these steep discounts offer a capital gains opportunity as the spread over treasuries declines and home construction activity increases in coming years.

This article was written by Jamie Dlugosch, contributor to InvestorPlace.com. For more actionable insight like this, go to: www.InvestorPlace.com. James F. Dlugosch contributed to this article.