Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer.

Trade-Ideas LLC identified

Graphic Packaging

(

GPK

) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Graphic Packaging as such a stock due to the following factors:

  • GPK has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $79.3 million.
  • GPK has traded 1.2 million shares today.
  • GPK is trading at 8.07 times the normal volume for the stock at this time of day.
  • GPK is trading at a new high 5.07% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on GPK:

Graphic Packaging Holding Company, together with its subsidiaries, provides paper-based packaging solutions to food, beverage, and other consumer products companies. The stock currently has a dividend yield of 1.5%. GPK has a PE ratio of 41. Currently there are 4 analysts that rate Graphic Packaging a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Graphic Packaging has been 3.4 million shares per day over the past 30 days. Graphic Packaging has a market cap of $4.5 billion and is part of the consumer goods sector and consumer non-durables industry. The stock has a beta of 0.72 and a short float of 2.7% with 1.44 days to cover. Shares are down 0.1% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Graphic Packaging as a

buy

. The company's strengths can be seen in multiple areas, such as its increase in net income, solid stock price performance and growth in earnings per share. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:

  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Containers & Packaging industry. The net income increased by 56.5% when compared to the same quarter one year prior, rising from $35.20 million to $55.10 million.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
  • GRAPHIC PACKAGING HOLDING CO reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, GRAPHIC PACKAGING HOLDING CO reported lower earnings of $0.28 versus $0.42 in the prior year. This year, the market expects an improvement in earnings ($0.74 versus $0.28).
  • GPK, with its decline in revenue, slightly underperformed the industry average of 0.4%. Since the same quarter one year prior, revenues slightly dropped by 6.0%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • The gross profit margin for GRAPHIC PACKAGING HOLDING CO is currently lower than what is desirable, coming in at 25.56%. Regardless of GPK's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, GPK's net profit margin of 5.46% compares favorably to the industry average.

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