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Are Investors Undervaluing Graphic Packaging (GPK) Right Now?

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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One company to watch right now is Graphic Packaging (GPK - Free Report) . GPK is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 12.24. This compares to its industry's average Forward P/E of 13.25. GPK's Forward P/E has been as high as 24.21 and as low as 12.24, with a median of 15.85, all within the past year.

Investors will also notice that GPK has a PEG ratio of 0.82. 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 industry currently sports an average PEG of 1.14. Over the past 52 weeks, GPK's PEG has been as high as 4.84 and as low as 0.82, with a median of 3.14.

Investors should also recognize that GPK has a P/B ratio of 1.81. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 4.89. GPK's P/B has been as high as 4.32 and as low as 1.81, with a median of 2.27, over the past year.

Finally, investors should note that GPK has a P/CF ratio of 5.58. 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 9.90. Within the past 12 months, GPK's P/CF has been as high as 10.29 and as low as 5.58, with a median of 7.28.

These are only a few of the key metrics included in Graphic Packaging's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, GPK looks like an impressive value stock at the moment.


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