Are Investors Undervaluing Packaging Corporation of America (PKG) Right Now?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
Packaging Corporation of America (PKG) is a stock many investors are watching right now. PKG is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.
We should also highlight that PKG has a P/B ratio of 3.83. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 8.54. Within the past 52 weeks, PKG's P/B has been as high as 3.91 and as low as 2.97, with a median of 3.45.
Finally, we should also recognize that PKG has a P/CF ratio of 11.48. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. PKG's P/CF compares to its industry's average P/CF of 20.96. PKG's P/CF has been as high as 11.73 and as low as 7.74, with a median of 8.93, all within the past year.
These are just a handful of the figures considered in Packaging Corporation of America's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that PKG is an impressive value stock right now.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Packaging Corporation of America (PKG) : Free Stock Analysis Report
