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Peter Lynch Guru Analysis for Packaging Corporation of America

PKG 
$79.15
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0.25
0.32%
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*Delayed - data as of Dec. 26, 2014  -  Find a broker to begin trading PKG now
Exchange: NYSE
Industry: Consumer Durables
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Assessments & Analysis Based on December 24, 2014 close price: $78.9

  for the P/E/Growth Investor based on the criteria of Peter Lynch. Return to PKG Guru Analysis

All Star Guru Scorecard

Source Go Chart %
Peter Lynch 54%
Benjamin Graham 57%
Validea 71%
Motley Fool 55%
David Dreman 64%
Martin Zweig 54%
Kenneth Fisher 60%
James P. O'Shaughnessy 50%



Detailed Analysis

Guru Score: 54%


Determine the Classification:

This methodology would consider PKG a "fast-grower".


P/E/Growth Ratio: [PASS]

The investor should examine the P/E (14.87) relative to the growth rate (24.24%), Based on the average of the 3, 4 and 5 year historical EPS growth rates, for a company. This is a quick way of determining the fairness of the price. In this particular case, the P/E/G ratio for PKG (0.61) makes it favorable.


SALES AND P/E RATIO: [PASS]

For companies with sales greater than $1 billion, this methodology likes to see that the P/E ratio remain below 40. Large companies can have a difficult time maintaining a growth high enough to support a P/E above this threshold. PKG, whose sales are $5,683.1 million, needs to have a P/E below 40 to pass this criterion. PKG's P/E of (14.87) is considered acceptable.


Inventory To Sales: [FAIL]

When inventories increase faster than sales, it is a red flag. However an increase of up to 5% is considered bearable if all other ratios appear attractive. Inventory to sales for PKG was 9.45% last year, while for this year it is 16.21%. Since inventory has been rising and the inventory change, 6.76% is greater than 5%, it fails this test.


EPS Growth Rate: [PASS]

This methodology favors companies that have several years of fast earnings growth, as these companies have a proven formula for growth that in many cases can continue many more years. This methodology likes to see earnings growth in the range of 20% to 50%, as earnings growth over 50% may be unsustainable. The EPS growth rate for PKG is 24.2%, Based on the average of the 3, 4 and 5 year historical EPS growth rates, which is considered very good.

 
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