Trade-Ideas LLC identified Packaging Corp of America ( PKG) as a "perilous reversal" (up big yesterday but down 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 $62.5 million.
  • PKG has traded 115,013 shares today.
  • PKG is down 3.2% today.
  • PKG was up 7.2% yesterday.

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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 16. 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 934,500 shares per day over the past 30 days. Packaging Corp of America has a market cap of $6.4 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 1.8% with 1.86 days to cover. Shares are down 10.7% year-to-date as of the close of trading on Friday.

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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, increase in stock price during the past year, 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.
  • After a year of stock price fluctuations, the net result is that PKG's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. 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 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 13.00%.
  • 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.

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