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Are Investors Undervaluing Graphic Packaging Holding Company (GPK) Right Now?

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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.

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.

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 Holding Company (GPK - Free Report) 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 is trading with P/E ratio of 9.23 right now. For comparison, its industry sports an average P/E of 13.86. Over the past year, GPK's Forward P/E has been as high as 9.39 and as low as 7.29, with a median of 8.34.

Investors should also recognize that GPK has a P/B ratio of 3.11. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 8.55. GPK's P/B has been as high as 3.61 and as low as 2.43, with a median of 3.05, over the past year.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. GPK has a P/S ratio of 0.82. This compares to its industry's average P/S of 0.96.

Finally, investors will want to recognize that GPK has a P/CF ratio of 6.16. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 20.97. Over the past 52 weeks, GPK's P/CF has been as high as 7.21 and as low as 4.82, with a median of 5.92.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Graphic Packaging Holding Company is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, GPK feels like a great value stock at the moment.

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