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The housing gem Wall Street isn’t talking about

15th May 24 10:06 am

As inflation continues to be above the Fed’s 2% target, the housing sector has taken a hit, with mortgages still high. Amidst this, housing stocks are taking a battering.

But Saqib Iqbal, a financial analyst at Trading.biz, thinks this is a good opportunity to buy housing stocks at a discount. He identified Owens Corning (NYSE: OC) as a potential stock worth buying.

  • Owens Corning (NYSE: OC) is undervalued and poised to grow amid the housing market recovery.
  • The company leads in sustainability with energy efficiency and carbon reduction products.
  • Strategic acquisitions and cost-saving initiatives bolster Owens Corning’s appeal.

He says, “I see the Fed cutting interest rate starting from September as the inflation starts to meet Feds target. If this happens, the market will price in recovery in the housing market at the end of 2024 and beyond. Owning Owens Corning, undervalued by 12%, makes a lot of sense.”

It’s not just the undervaluation; Owens is a market leader in sustainability in the construction and building sector. Performance, energy efficiency, and sustainability are three key goals of the company, as demonstrated by their proprietary EcoTouch® insulation and Thermafiber® insulation products.

According to the recent earnings report, energy-saving and carbon-reduction products accounted for 59% of the company’s revenues.

The company also plans to expand into the residential building product space by acquiring Masonite by mid-2024. Using sourcing/supply chain initiatives and shared selling, general, and administrative costs, Owens Corning expects to generate $125 million in cost synergies through this acquisition.

In addition, the company returned $182 million to shareholders through dividends and share repurchases.

So, considering all these factors, Saqib thinks it’s time to get in on the stock before it shoots up.

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