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Is Quad/Graphics Inc (NYSE:QUAD) Potentially Underrated?

As an investor, I look for investments which does not compromise one fundamental factor for another. By this I mean, I look at stocks holistically, from their financial health to their future outlook. In the case of Quad/Graphics Inc (NYSE:QUAD), it is a company with an optimistic future outlook, which has not yet been factored into the price. Below, I’ve touched on some key aspects you should know on a high level. For those interested in digger a bit deeper into my commentary, take a look at the report on Quad/Graphics here.

Very undervalued with high growth potential

One reason why investors are attracted to QUAD is its notable earnings growth potential in the near future of 21%. This growth in the bottom-line is bolstered by an impressive top-line expansion of 78% over the same period, which is a sustainable driver of high-quality earnings, as opposed to pure cost-cutting activities. QUAD is currently trading below its true value, which means the market is undervaluing the company’s expected cash flow going forward. Investors have the opportunity to buy into the stock to reap capital gains, if QUAD’s projected earnings trajectory does follow analyst consensus growth, which determines my intrinsic value of the company. Compared to the rest of the commercial services industry, QUAD is also trading below its peers, relative to earnings generated. This bolsters the proposition that QUAD’s price is currently discounted.

NYSE:QUAD Future Profit November 24th 18
NYSE:QUAD Future Profit November 24th 18

Next Steps:

For Quad/Graphics, there are three essential aspects you should look at:

  1. Historical Performance: What has QUAD’s returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.

  2. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.

  3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of QUAD? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.

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