Trade-Ideas LLC identified Graphic Packaging ( GPK) as a "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) 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 $45.6 million.
  • GPK has traded 2.9 million shares today.
  • GPK traded in a range 206.5% of the normal price range with a price range of $0.52.
  • GPK traded above its daily resistance level (quality: 94 days, meaning that the stock is crossing a resistance level set by the last 94 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Barbarian at the Gate' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock's movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher.

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More details on GPK:

Graphic Packaging Holding Company, together with its subsidiaries, provides paper-based packaging solutions to food, beverage, and other consumer products companies. The company operates in three segments: Paperboard Mills, Americas Paperboard Packaging, and Europe Paperboard Packaging. The stock currently has a dividend yield of 1.5%. GPK has a PE ratio of 18. Currently there are 5 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 3.6 million shares per day over the past 30 days. Graphic Packaging has a market cap of $4.2 billion and is part of the consumer goods sector and consumer non-durables industry. The stock has a beta of 1.15 and a short float of 1.6% with 1.15 days to cover. Shares are up 2.2% year-to-date as of the close of trading on Monday.

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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 revenue growth, growth in earnings per share, increase in net income, good cash flow from operations and notable return on equity. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 10.4%. Since the same quarter one year prior, revenues slightly increased by 2.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • GRAPHIC PACKAGING HOLDING CO has improved earnings per share by 5.9% 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 two years. We feel that this trend should continue. During the past fiscal year, GRAPHIC PACKAGING HOLDING CO increased its bottom line by earning $0.69 versus $0.28 in the prior year. This year, the market expects an improvement in earnings ($0.79 versus $0.69).
  • 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 4.3% when compared to the same quarter one year prior, going from $55.10 million to $57.50 million.
  • Net operating cash flow has significantly increased by 110.83% to $58.40 million when compared to the same quarter last year. In addition, GRAPHIC PACKAGING HOLDING CO has also vastly surpassed the industry average cash flow growth rate of -47.92%.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Containers & Packaging industry and the overall market on the basis of return on equity, GRAPHIC PACKAGING HOLDING CO has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.

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