Trade-Ideas LLC identified Packaging Corp of America ( PKG) as a strong on high relative volume 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 $51.2 million.
  • PKG has traded 496,990 shares today.
  • PKG is trading at 18.56 times the normal volume for the stock at this time of day.
  • PKG is trading at a new high 6.06% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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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 3.4%. PKG has a PE ratio of 15. Currently there are 7 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 939,500 shares per day over the past 30 days. Packaging Corp of America has a market cap of $6.3 billion and is part of the consumer goods sector and consumer non-durables industry. The stock has a beta of 1.52 and a short float of 1.7% with 1.68 days to cover. Shares are down 16.7% year-to-date as of the close of trading on Thursday.

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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, growth in earnings per share, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. We feel its strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Containers & Packaging industry average. The net income increased by 14.5% when compared to the same quarter one year prior, going from $99.56 million to $114.00 million.
  • PACKAGING CORP OF AMERICA has improved earnings per share by 14.9% in the most recent quarter compared to 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, 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 ($4.65 versus $3.99).
  • Net operating cash flow has slightly increased to $196.20 million or 6.14% when compared to the same quarter last year. Despite an increase in cash flow, PACKAGING CORP OF AMERICA's average is still marginally south of the industry average growth rate of 13.19%.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 1.9%. Since the same quarter one year prior, revenues slightly dropped by 0.9%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • Even though the current debt-to-equity ratio is 1.49, it is still below the industry average, suggesting that this level of debt is acceptable within the Containers & Packaging industry. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.44 is sturdy.

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