📉 Resilient Trader Trade Idea: The Rebuilding Rally in Owens Corning (OC)

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Resilient Trader is where smart traders come for vetted ideas.

Every week, we cut through the noise and surface opportunities that institutions are already eyeing - but with strategies tailored for retail traders. Today’s setup? A building products leader that’s been beaten down but is poised for a powerful rebound.

We’ll cover:

• Why Owens Corning is a Buy at current levels

• How to take advantage with a levered call spread

🔍 Trade Thesis: OC is Building a Foundation for a Breakout

Owens Corning (OC) has been beaten down, trading 40% off its 2024 highs. We think the market is wrong and is missing a powerful setup for a rebound.

Behind the scenes:

📉 Interest Rates on the Decline: The Fed is expected to cut rates in 2026, making housing more affordable and sparking demand.

🏠 Aging Housing Fleet: The U.S. has the oldest housing stock in its history (median age: 40 years). This creates a massive, non-discretionary demand for roofing and insulation replacements.

🧱 Consolidated Industry: The weak players have been flushed out. OC operates in a rational market with strong pricing power.

📊 The Fundamentals Are Solid

Let’s break it down:

💰 Revenue: $10.1B in 2025. While down from a hot 2024, the long-term trend is up and 2026 is guided to stabilize.

📈 Profit Margins: The company prints cash. They’ve delivered an adjusted EBITDA margin over 20% for five straight years.

💪 Balance Sheet: Solid. Net debt-to-EBITDA of 2.1x gives them flexibility.

💸 Cash Flow: A cash-flow machine. Generated $962M in free cash flow in 2025 and returned $1B to shareholders.

📐 Valuation Is Compelling

OC is priced for a recession that isn't coming:

⚖️ EV/EBITDA: 6.9x vs. peers like TopBuild at 12.5x. It's just too cheap.

🏷️ Forward P/E: 13.1x. You're not paying a premium for the coming recovery.

🧭 Technicals Suggest a Bottom is In

✅ Finding support: The stock is building a solid base around the $123 level (right at the 50-day moving average).

✅ RSI turning up: The 14-day RSI at 41.22 is not overbought and has plenty of room to run.

✅ Stochastics deeply oversold: The 9-day stochastic is at 3.64%, a level that often precedes sharp bounces.

❌ Resistance: The 200-day moving average at $131.76 is the first hurdle. A break above that is rocket fuel.

💰 Current price: $123.48(as of last night’s close)

🎯 Targets: $140 (initial), $150 (intermediate), $175 (full bull case)

💥 Trade of the Week: Levered Bullish Exposure

We’re combining a stock purchase with a defined-risk options strategy for a levered bullish position.

🟢 Trade Setup

• Buy OC at the current level of $123.48

🛡️ Options Play

This is a three-legged options trade that gets you paid to get long.

• Sell the Dec 18th $110 Put: for $10.50 credit

• Buy the Dec 18th $140 Call: for $12.00 debit

• Sell the Dec 18th $175 Call: for $3.00 credit

This entire structure can be traded for a net credit of $1.50.

📈 Risk-Reward

• Max Risk: Your risk is being assigned stock at an effective price of $108.50.

• Max Reward: $36.50 per share.

• Breakeven: $108.50 (downside) / $149.00 (upside).

• Risk-Reward Ratio: 1:2.4 on the call spread portion, with the put sale funding the trade.

🚀 Catalysts on the Horizon

Keep your eyes on:

1. Fed Rate Cuts: The first cut is the starting gun for the housing trade.

2. Storm Season: A normal hurricane or winter storm season drives huge demand for roofing.

3. Doors Divestiture: When this deal closes, the stock will re-rate higher.

4. Analyst Upgrades: Wall Street will wake up to this story soon.

🧠 Final Thoughts

OC is a classic case of a solid company with strong fundamentals that has been unfairly punished by the market. With a number of positive catalysts on the horizon, we believe the stock is poised for a significant rebound.

✅ Buy $OC ( ▼ 2.49% )  at $123.48
💸 Execute the levered call spread for a $1.50 credit

We'll be watching this one closely.

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Stay Liquid, my friends and Happy New Year!
- The Resilient Trader

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