Strong And Under The Radar Today: 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 $65.0 million.
  • GPK is making at least a new 3-day high.
  • GPK has a PE ratio of 44.6.
  • GPK is mentioned 1.52 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 44.6. 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 4.4 million shares per day over the past 30 days. Graphic Packaging has a market cap of $4.1 billion and is part of the consumer goods sector and consumer non-durables industry. The stock has a beta of 1.29 and a short float of 3.2% with 1.74 days to cover. Shares are up 31.6% year-to-date as of the close of trading on Thursday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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 growth in earnings per share, good cash flow from operations, solid stock price performance, increase in net income and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • GRAPHIC PACKAGING HOLDING CO has improved earnings per share by 23.1% 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 ($0.65 versus $0.42).
  • Net operating cash flow has increased to $177.60 million or 11.27% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -10.02%.
  • 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 40.50% over the past year, a rise that has exceeded that of the S&P 500 Index. 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.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Containers & Packaging industry average. The net income increased by 19.1% when compared to the same quarter one year prior, going from $44.50 million to $53.00 million.
  • GPK, with its decline in revenue, underperformed when compared the industry average of 10.4%. Since the same quarter one year prior, revenues slightly dropped by 9.7%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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