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.

Trade-Ideas LLC identified Packaging Corp of America ( PKG) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Packaging Corp of America as such a stock due to the following factors:

  • PKG has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $92.8 million.
  • PKG has traded 562,390 shares today.
  • PKG is up 3.5% today.
  • PKG was down 10.4% yesterday.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in PKG with the Ticky from Trade-Ideas. See the FREE profile for PKG NOW at Trade-Ideas

More details on PKG:

Packaging Corporation of America manufactures and sells containerboard and corrugated packaging products in the United States, Europe, Mexico, and Canada. The stock currently has a dividend yield of 2.9%. PKG has a PE ratio of 19.3. Currently there are 6 analysts that rate Packaging Corp of America a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for Packaging Corp of America has been 925,000 shares per day over the past 30 days. Packaging Corp of America has a market cap of $7.6 billion and is part of the consumer goods sector and consumer non-durables industry. The stock has a beta of 1.45 and a short float of 1.5% with 1.13 days to cover. Shares are down 11.6% year-to-date as of the close of trading on Tuesday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Packaging Corp of America as a buy. The company's strengths can be seen in multiple areas, such as its increase in net income and solid stock price performance. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • 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 $90.09 million to $90.80 million.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • PACKAGING CORP OF AMERICA reported flat earnings per share in the most recent quarter. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, PACKAGING CORP OF AMERICA reported lower earnings of $3.99 versus $4.53 in the prior year. This year, the market expects an improvement in earnings ($4.95 versus $3.99).
  • PKG, with its decline in revenue, slightly underperformed the industry average of 3.1%. Since the same quarter one year prior, revenues slightly dropped by 0.4%. Weakness in the company's revenue seems to not be hurting the bottom line, shown by stable earnings per share.
  • The gross profit margin for PACKAGING CORP OF AMERICA is currently lower than what is desirable, coming in at 26.70%. It has decreased from the same quarter the previous year. Regardless of the weak results of the gross profit margin, the net profit margin of 6.36% is above that of the industry average.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

null