Australia markets close in 4 hours 40 minutes

    -13.10 (-0.18%)
  • ASX 200

    -14.40 (-0.20%)

    +0.0008 (+0.13%)
  • OIL

    +0.27 (+0.30%)
  • GOLD

    -2.70 (-0.14%)
  • Bitcoin AUD

    +1,518.99 (+3.63%)
  • CMC Crypto 200

    +22.67 (+3.92%)

    +0.0011 (+0.18%)

    +0.0015 (+0.14%)
  • NZX 50

    -68.77 (-0.61%)

    +12.44 (+0.08%)
  • FTSE

    +6.23 (+0.08%)
  • Dow Jones

    -158.80 (-0.47%)
  • DAX

    +63.08 (+0.41%)
  • Hang Seng

    +436.66 (+2.51%)
  • NIKKEI 225

    +346.02 (+1.09%)

Should Value Investors Buy Graphic Packaging Holding Company (GPK) Stock?

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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.

One stock to keep an eye on is Graphic Packaging Holding Company (GPK). GPK is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock holds a P/E ratio of 8.35, while its industry has an average P/E of 12.38. Over the last 12 months, GPK's Forward P/E has been as high as 10.28 and as low as 7.84, with a median of 8.98.

Investors will also notice that GPK has a PEG ratio of 0.33. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. GPK's PEG compares to its industry's average PEG of 0.97. Within the past year, GPK's PEG has been as high as 0.41 and as low as 0.31, with a median of 0.36.

Another notable valuation metric for GPK is its P/B ratio of 3.39. 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 7.88. 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. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. GPK has a P/S ratio of 0.82. This compares to its industry's average P/S of 0.85.

Finally, our model also underscores that GPK has a P/CF ratio of 6.66. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. GPK's current P/CF looks attractive when compared to its industry's average P/CF of 20.35. Over the past year, GPK's P/CF has been as high as 9.12 and as low as 6.20, with a median of 7.08.

Value investors will likely look at more than just these metrics, but the above data helps show that Graphic Packaging Holding Company is likely undervalued currently. And when considering the strength of its earnings outlook, GPK sticks out at as one of the market's strongest value stocks.

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

Graphic Packaging Holding Company (GPK) : Free Stock Analysis Report

To read this article on click here.

Zacks Investment Research