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Are Investors Undervaluing Graphic Packaging (GPK) Right Now?

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

Graphic Packaging (GPK) is a stock many investors are watching right now. GPK is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 13.66, while its industry has an average P/E of 15.56. Over the last 12 months, GPK's Forward P/E has been as high as 19.06 and as low as 10.84, with a median of 14.64.

Investors should also note that GPK holds a PEG ratio of 0.55. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. GPK's PEG compares to its industry's average PEG of 1.26. Within the past year, GPK's PEG has been as high as 1.23 and as low as 0.43, with a median of 0.92.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. GPK has a P/S ratio of 0.65. This compares to its industry's average P/S of 1.06.

Finally, our model also underscores that GPK has a P/CF ratio of 7.11. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 20.13. Over the past 52 weeks, GPK's P/CF has been as high as 7.59 and as low as 4.68, with a median of 6.75.

These are just a handful of the figures considered in Graphic Packaging's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that GPK is an impressive value stock right now.


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