Analyst Favorites With Strong Buyback Activity: Graphic Packaging Holding Ranks As a Top Pick

A study of analyst recommendations at the major brokerages shows that Graphic Packaging Holding Co (GPK) is the #6 broker analyst pick among those stocks screened by The Online Investor for strong stock buyback activity. To make that list, a stock must have repurchased at least 5% of its outstanding shares over the trailing twelve month period. In forming the rank, the analyst opinions from the major brokerage houses were tallied, and averaged; then, the list of stocks with strong buyback activity was ranked according to those averages.

Investors are often keenly interested in knowing which companies are buying back their own stock, because companies often will only make such a move if they feel their stock is undervalued. Graphic Packaging Holding Co is a company with strong buyback activity that is also considered a compelling buy by analysts; a bullish investor could take this to mean that sharp analyst minds came to the same bullish conclusion as the company itself that the stock is a good value, and therefore the stock should do well in the future.

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Top 25 Analyst Picks With Strong Stock Repurchase Activity »

Analysts studying companies buying back their own stock will also factor into their analysis that future earnings will now be spread over a smaller share count, thereby increasing the per-share earnings the remaining shares will enjoy, versus what that same number would have been absent the stock buyback activity.

According to the ETF Finder at ETF Channel, GPK makes up 2.71% of the PowerShares DWA Industrials Momentum Portfolio ETF (PRN) which is trading lower by about 0.7% on the day Tuesday.

GPK operates in the Packaging & Containers sector, among companies like Sealed Air Corp. (SEE) which is off about 1.1% today, and Rock-Tenn Co. (RKT) trading lower by about 1.2%. Below is a three month price history chart comparing the stock performance of GPK, versus SEE and RKT.

GPK,SEE,RKT Relative Performance Chart

GPK is currently trading off about 1.7% midday Tuesday.

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