Today's Strong And Under The Radar Stock Is Graphic Packaging (GPK)

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 Graphic Packaging ( GPK) as a strong and under the radar 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 $39.4 million.
  • GPK is making at least a new 3-day high.
  • GPK has a PE ratio of 51.0.
  • GPK is mentioned 1.39 times per day on StockTwits.
  • GPK has not yet been mentioned on StockTwits today.
  • GPK is currently in the upper 20% of its 1-year range.
  • GPK is in the upper 35% of its 20-day range.
  • GPK is in the upper 45% of its 5-day range.
  • GPK is currently trading above yesterday's high.

'Strong and Under the Radar' stocks tend to be worthwhile stocks to watch for a variety of factors including historical back testing and price action. Market technicians refer to such stocks as being in an accumulation phase before a mark-up and peak. Traders and hedge funds have frequently found that these types of stocks continue to build a solid price base and then ultimately spike higher and peak when others 'discover' how good the stock is performing. By leveraging the social discovery aspect of StockTwits we are highlighting stocks that don't currently receive much attention from retail investors, but we suspect may soon garner more attention.

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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 51.0. 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 3.9 million shares per day over the past 30 days. Graphic Packaging has a market cap of $4.2 billion and is part of the consumer goods sector and consumer non-durables industry. The stock has a beta of 1.82 and a short float of 1.7% with 2.37 days to cover. Shares are up 33.5% year-to-date as of the close of trading on Friday.

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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 solid stock price performance and good cash flow from operations. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • Compared to its closing price of one year ago, GPK's share price has jumped by 50.88%, exceeding the performance of the broader market during that same time frame. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
  • GRAPHIC PACKAGING HOLDING CO has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from 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 increased its bottom line by earning $0.42 versus $0.31 in the prior year. This year, the market expects an improvement in earnings ($0.70 versus $0.42).
  • Net operating cash flow has slightly increased to $123.70 million or 1.55% when compared to the same quarter last year. Despite an increase in cash flow, GRAPHIC PACKAGING HOLDING CO's cash flow growth rate is still lower than the industry average growth rate of 18.17%.
  • GPK, with its decline in revenue, underperformed when compared the industry average of 9.3%. Since the same quarter one year prior, revenues slightly dropped by 2.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The gross profit margin for GRAPHIC PACKAGING HOLDING CO is currently lower than what is desirable, coming in at 25.30%. 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, the net profit margin of -3.58% trails the industry average.

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