Trade-Ideas LLC identified

KapStone Paper And Packaging

(

KS

) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified KapStone Paper And Packaging as such a stock due to the following factors:

  • KS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $29.4 million.
  • KS has traded 62,999 shares today.
  • KS is down 5% today.
  • KS was up 11.4% yesterday.

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More details on KS:

KapStone Paper and Packaging Corporation manufactures and sells containerboards, corrugated products, and specialty paper products in the United States and internationally. The stock currently has a dividend yield of 2.1%. KS has a PE ratio of 12. Currently there are 6 analysts that rate KapStone Paper And Packaging a buy, no analysts rate it a sell, and 2 rate it a hold.

TheStreet Recommends

The average volume for KapStone Paper And Packaging has been 826,800 shares per day over the past 30 days. KapStone Paper And Packaging has a market cap of $1.8 billion and is part of the consumer goods sector and consumer non-durables industry. The stock has a beta of 1.87 and a short float of 2.8% with 1.67 days to cover. Shares are down 33.4% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates KapStone Paper And Packaging as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, attractive valuation levels, good cash flow from operations and notable return on equity. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 5.7%. Since the same quarter one year prior, revenues rose by 13.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Net operating cash flow has slightly increased to $76.50 million or 9.74% when compared to the same quarter last year. In addition, KAPSTONE PAPER & PACKAGING has also vastly surpassed the industry average cash flow growth rate of -69.11%.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Paper & Forest Products industry and the overall market, KAPSTONE PAPER & PACKAGING's return on equity exceeds that of both the industry average and the S&P 500.
  • KAPSTONE PAPER & PACKAGING's earnings per share declined by 34.0% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, KAPSTONE PAPER & PACKAGING increased its bottom line by earning $1.77 versus $1.32 in the prior year. For the next year, the market is expecting a contraction of 2.8% in earnings ($1.72 versus $1.77).

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