Owens Corning (OC)

Industrials

Kailash Capital Research

Investors seem to believe the business is more cyclical than it is causing OC to trade at a far steeper discount to the market than it deserves. Management has successfully raised prices and controlled costs meaning its financial results look more like those of a growth company. Yet its shares trade at <14x earnings and an EV/Adjusted EBITDA of just 7.3x. Both figures represent >40% discounts to the S&P 500 Index. KCR also finds it notable that both their Large Cap Value and Large Cap Core models rank OC in the top 100 despite significantly different loadings. When a stock is highly ranked across models with divergent mandates, it signifies greater potential interest across the investor base.

- 26 July, 2024

Building an all-weather environmental strategy

Sustainable Market Strategies

Rising interest rates were detrimental to renewable energy stocks in 2023, underscoring that using solely renewable energy plays as short hand for climate change investing is myopic and risky. The consequences of climate change go far beyond a low-carbon energy transition and the associated investment opportunities (and risks) are equally numerous and varied; building an environmental portfolio requires careful consideration of the macro backdrop. In the current macro context, the Sustainable Market Strategies team find US plays particularly compelling. Newly listed Veralto Corp, Owens Corning and Weyerhaeuser are three companies that should do well next year and are tackling three distinct environmental problems.

- 08 December, 2023

Owens Corning (OC) & Beacon Roofing Supply (BECN)

Materials

Residential roofing checks reveal very strong start to 2022 - 1Q22 SSS growth expectation is 20-25% (Feb was insane with most contacts suggesting SSS up 40%+; Jan & Mar both likely grew 15-25%). Contacts suggest the Jan price increase is gaining solid traction and many think the Apr increase is going to be huge. Inflation is the offset which keeps getting worse, but the industry has benefited from inflation and Northcoast thinks this can continue. Overall, they view their checks favourably for manufacturers and distributors and raise their full year estimates for OC and BECN.

- 01 April, 2022