Back to top

Image: Bigstock

Are Investors Undervaluing Greif (GEF) Right Now?

Read MoreHide Full Article

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

Greif (GEF - Free Report) is a stock many investors are watching right now. GEF is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock holds a P/E ratio of 8.57, while its industry has an average P/E of 10.67. Over the past 52 weeks, GEF's Forward P/E has been as high as 12.92 and as low as 8.15, with a median of 9.60.

Investors will also notice that GEF has a PEG ratio of 0.86. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. GEF's PEG compares to its industry's average PEG of 1.21. Over the last 12 months, GEF's PEG has been as high as 1.29 and as low as 0.81, with a median of 0.96.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. GEF has a P/S ratio of 0.46. This compares to its industry's average P/S of 0.88.

Investors could also keep in mind Graphic Packaging Holding Company (GPK - Free Report) , an Containers - Paper and Packaging stock with a Zacks Rank of # 1 (Strong Buy) and Value grade of A.

Shares of Graphic Packaging Holding Company are currently trading at a forward earnings multiple of 8.54 and a PEG ratio of 0.34 compared to its industry's P/E and PEG ratios of 10.67 and 1.21, respectively.

Over the last 12 months, GPK's P/E has been as high as 17.63, as low as 8.29, with a median of 9.93, and its PEG ratio has been as high as 0.71, as low as 0.33, with a median of 0.40.

Furthermore, Graphic Packaging Holding Company holds a P/B ratio of 3.31 and its industry's price-to-book ratio is 7.78. GPK's P/B has been as high as 3.85, as low as 2.95, with a median of 3.31 over the past 12 months.

These are only a few of the key metrics included in Greif and Graphic Packaging Holding Company strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, GEF and GPK look like an impressive value stock at the moment.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Graphic Packaging Holding Company (GPK) - free report >>

Greif, Inc. (GEF) - free report >>

Published in