Should You Investigate Orion Engineered Carbons S.A. (NYSE:OEC) At US$17.55?

Orion Engineered Carbons S.A. (NYSE:OEC), might not be a large cap stock, but it saw significant share price movement during recent months on the NYSE, rising to highs of US$20.29 and falling to the lows of US$17.37. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Orion Engineered Carbons' current trading price of US$17.55 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Orion Engineered Carbons’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for Orion Engineered Carbons

What is Orion Engineered Carbons worth?

Good news, investors! Orion Engineered Carbons is still a bargain right now according to my price multiple model, which compares the company's price-to-earnings ratio to the industry average. In this instance, I’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that Orion Engineered Carbons’s ratio of 7.47x is below its peer average of 20.88x, which indicates the stock is trading at a lower price compared to the Chemicals industry. What’s more interesting is that, Orion Engineered Carbons’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

What does the future of Orion Engineered Carbons look like?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. However, with a relatively muted profit growth of 7.9% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Orion Engineered Carbons, at least in the short term.

What this means for you:

Are you a shareholder? Even though growth is relatively muted, since OEC is currently trading below the industry PE ratio, it may be a great time to increase your holdings in the stock. However, there are also other factors such as financial health to consider, which could explain the current price multiple.

Are you a potential investor? If you’ve been keeping an eye on OEC for a while, now might be the time to make a leap. Its future profit outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy OEC. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed assessment.

In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. Case in point: We've spotted 2 warning signs for Orion Engineered Carbons you should be aware of.

If you are no longer interested in Orion Engineered Carbons, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.