Should Value Investors Buy Graphic Packaging Holding Company (GPK) Stock?
Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One stock to keep an eye on is Graphic Packaging Holding Company (GPK). GPK is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 8.66, while its industry has an average P/E of 12.42. Over the past year, GPK's Forward P/E has been as high as 10.78 and as low as 8.29, with a median of 9.18.
Another notable valuation metric for GPK is its P/B ratio of 3.42. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 7.97. Within the past 52 weeks, GPK's P/B has been as high as 3.85 and as low as 3.04, with a median of 3.40.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. GPK has a P/S ratio of 0.77. This compares to its industry's average P/S of 0.78.
Finally, investors should note that GPK has a P/CF ratio of 6.83. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 20.05. Within the past 12 months, GPK's P/CF has been as high as 9.12 and as low as 6.20, with a median of 7.68.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Graphic Packaging Holding Company is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, GPK feels like a great value stock at the moment.
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Graphic Packaging Holding Company (GPK) : Free Stock Analysis Report
