Is Graphic Packaging (GPK) a Great Value Stock 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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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). GPK is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock has a Forward P/E ratio of 14.67. This compares to its industry's average Forward P/E of 15.38. Over the past 52 weeks, GPK's Forward P/E has been as high as 17.63 and as low as 10.08, with a median of 14.36.
GPK is also sporting a PEG ratio of 1.13. 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 1.58. GPK's PEG has been as high as 3.53 and as low as 0.67, with a median of 1.06, all within the past year.
Another notable valuation metric for GPK is its P/B ratio of 1.87. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 5.39. Over the past 12 months, GPK's P/B has been as high as 2.31 and as low as 1.40, with a median of 1.94.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. GPK has a P/S ratio of 0.63. This compares to its industry's average P/S of 1.16.
Finally, we should also recognize that GPK has a P/CF ratio of 5.97. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. GPK's P/CF compares to its industry's average P/CF of 13.27. GPK's P/CF has been as high as 7.55 and as low as 4.07, with a median of 5.95, all within the past year.
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.
Click to get this free report
Graphic Packaging Holding Company (GPK): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.