Trade-Ideas LLC identified

Graphic Packaging

(

GPK

) as a "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) 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 $43.6 million.
  • GPK has traded 928,065 shares today.
  • GPK traded in a range 227.3% of the normal price range with a price range of $0.66.
  • GPK traded above its daily resistance level (quality: 1 day, meaning that the stock is crossing a resistance level set by the last 1 calendar day. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Barbarian at the Gate' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock's movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher.

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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 1.7%. GPK has a PE ratio of 19. 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 2.9 million shares per day over the past 30 days. Graphic Packaging has a market cap of $3.9 billion and is part of the consumer goods sector and consumer non-durables industry. The stock has a beta of 1.09 and a short float of 0.3% with 0.27 days to cover. Shares are down 5.8% 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 revenue growth, increase in net income, growth in earnings per share, notable return on equity and largely solid financial position with reasonable debt levels by most measures. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:

  • GPK's revenue growth has slightly outpaced the industry average of 4.3%. Since the same quarter one year prior, revenues slightly increased by 1.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • 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 13.6% when compared to the same quarter one year prior, going from $53.00 million to $60.20 million.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Containers & Packaging industry and the overall market on the basis of return on equity, GRAPHIC PACKAGING HOLDING CO has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • GRAPHIC PACKAGING HOLDING CO has improved earnings per share by 12.5% 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 ($0.72 versus $0.28).
  • Despite the current debt-to-equity ratio of 1.81, it is still below the industry average, suggesting that this level of debt is acceptable within the Containers & Packaging industry. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.82 is weak.

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