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 or Stephanie Link.
Trade-Ideas LLC identified
) 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 $26.8 million.
- GPK has traded 977,933 shares today.
- GPK traded in a range 205.2% of the normal price range with a price range of $0.39.
- GPK traded above its daily resistance level (quality: 3 days, meaning that the stock is crossing a resistance level set by the last 3 calendar days. 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.
EXCLUSIVE OFFER: Get the inside scoop on opportunities in GPK with the Ticky from Trade-Ideas. See the FREE profile for GPK NOW at Trade-Ideas
More details on GPK:
Graphic Packaging Holding Company, together with its subsidiaries, provides packaging solutions in the United States, Canada, Central/South America, Europe, and the Asia-Pacific. The company operates in two segments, Paperboard Packaging and Flexible Packaging. GPK has a PE ratio of 27.3. Currently there are 4 analysts that rate Graphic Packaging a buy, no analysts rate it a sell, and none rate it a hold.
The average volume for Graphic Packaging has been 4.3 million shares per day over the past 30 days. Graphic Packaging has a market cap of $3.8 billion and is part of the consumer goods sector and consumer non-durables industry. The stock has a beta of 1.98 and a short float of 1.7% with 2.07 days to cover. Shares are up 22.2% year-to-date as of the close of trading on Thursday.
rates Graphic Packaging as a
. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, increase in net income, good cash flow from operations and solid stock price performance. We feel these 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:
- GRAPHIC PACKAGING HOLDING CO has improved earnings per share by 10.0% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, GRAPHIC PACKAGING HOLDING CO increased its bottom line by earning $0.42 versus $0.31 in the prior year. This year, the market expects an improvement in earnings ($0.66 versus $0.42).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Containers & Packaging industry average. The net income increased by 0.8% when compared to the same quarter one year prior, going from $34.90 million to $35.20 million.
- Net operating cash flow has significantly increased by 351.26% to $29.90 million when compared to the same quarter last year. In addition, GRAPHIC PACKAGING HOLDING CO has also vastly surpassed the industry average cash flow growth rate of -82.47%.
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 34.81% over the past year, a rise that has exceeded that of the S&P 500 Index. Looking ahead, the stock's sharp 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 other strengths this company displays justify these higher price levels.
- GPK, with its decline in revenue, slightly underperformed the industry average of 5.7%. Since the same quarter one year prior, revenues slightly dropped by 2.5%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- You can view the full Graphic Packaging Ratings Report.