Is This Materials Giant Built to Last?

One of the best ways to develop a picture of any company involves the SWOT analysis – an examination of a company's strengths, weaknesses, opportunities, and threats. Today, I'd like to focus on Owens Corning (NYSE: OC  ) , the building-materials and glass fiber mid-cap.

Strengths

• Brand. Growing up, I knew two things about insulation: It's pink, and you're not supposed to touch it. Add a splash of litigation on Owens Corning's part, and it turns out that insulation is technically PINK (all caps), and that other companies must use another color (Owens Corning is the first company to actually trademark a hue). The company also has a mascot, which at first seems odd, but later seems friendly, highly recognizable, and lucrative. The Pink Panther has pitched Owens Corning products since the '80s, and their relationship is so ingrained in society that even the TV show Family Guy has made fun of it.
• Innovation. OC has a history of creating new developments. It's on board with a Lockheed Martin (NYSE: LMT  ) subsidiary, using nanotechnology to improve composites fabrication. The new technology would allow carbon nanostructures to reinforce fabricated composites. Strong, light, carbon-enhanced materials are highly desirable as alternatives to heavier metal products. Though this collaboration will not yield profits today, it's an excellent sign for tomorrow.
• Solvency. Owens Corning paid off a $600 million term loan in 2010. In 2011, OC only carried $1.8 billion in debt, minus cash on hand. In contrast, building-materials player USG (NYSE: USG  ) has half the annual revenue of OC, and $2.3 billion in debt.

Weaknesses

• Capacity. OC plants only managed 50% capacity utilization last year. This number needs to improve if OC intends to stay competitive with nemesis Johns Manville. This key rival has already increased its capacity in 2011.

Opportunities

• China. OK, everyone lists China as an opportunity, but Owens Corning isn't just talking about it. The company's significantly expanding its presence in China; its new reinforcements facility in Hangzhou is expected to be profitable in the second quarter of 2011 -- also known as right now.

Threats

• Housing. Though its products can be used in home repair, the wheezing U.S. housing recovery will nonetheless hurt OC. Roofing and insulation made up roughly 60% of its net sales in Q1 2011. Both segments fell year over year, contributing to the company's 2% drop in net sales. This is a cyclical industry, and the numbers are likely to bounce back. When, exactly? Owens Corning would very much like to know.
• Competition.  Owens Corning is one of three producers who comprise 80% of the market in North America. OC holds the leading market position, but privately held CertainTeed and Berkshire Hathaway-owned Johns Manville make for threatening competitors. OC also has to deal with minor players like paint behemoth PPG Industries (NYSE: PPG  ) , 7% of whose business comes from fiber glass.

What parts of Owens Corning's SWOT need more detail? Fill in the blanks by using the comments section below.