Is Graphic Packaging Holding Company (GPK) a high value stock right now?


HAt Zacks, we focus on the proven Zacks Rank system, which emphasizes earnings estimates and estimate reviews to find great stocks. Nonetheless, we are always on the lookout for the latest trends in value, growth and momentum to highlight solid picks.

Given these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use proven metrics and fundamental analysis to find companies they believe are undervalued at their current stock price level.

In addition to the Zacks Ranking, investors looking for stocks with specific characteristics can use our Style Scores system. Of course, value investors will be more interested in the “Value” category of the system. Stocks with “A” ratings for value and high Zacks ranks are some of the best value stocks available at any time.

Graphic Packaging Holding Company (GPK) is a stock that many investors are watching right now. GPK currently holds a Zacks rank of #2 (buy) and a value rating of A. The stock is currently trading with a P/E ratio of 9.53. For comparison, its industry has an average P/E of 12.30. Over the past 52 weeks, GPK’s P/E Forward has been as high as 17.63 and as low as 8.59, with a median of 10.22.

Another notable valuation metric for GPK is its P/E ratio of 3.42. The P/B ratio is used to compare the market value of a stock to its book value, which is defined as total assets minus total liabilities. GPK’s current P/B looks attractive compared to its industry average P/B of 8.46. Over the past year, GPK’s P/B has been as high as 3.62 and as low as 2.93, with a median of 3.28.

Value investors also value the P/S ratio, which is calculated by simply dividing a stock’s price by the company’s sales. This is a popular metric because sales are harder to manipulate on an income statement, so it’s often seen as a better performance indicator. GPK has a P/S ratio of 0.83. This compares to its industry average P/S of 0.93.

Finally, we must also recognize that GPK has a P/CF ratio of 8.62. This measure focuses on a company’s operating cash flow and is often used to find undervalued stocks based on the strength of their cash flow outlook. This company’s current P/CF looks solid compared to its industry average P/CF of 23.48. GPK’s P/CF has been as high as 9.25 and as low as 7.32, with a median of 8.43, all over the past year.

Value investors will likely scrutinize more than these metrics, but the data above helps show that Graphic Packaging Holding Company is likely undervalued right now. And given its strong earnings outlook, GPK stands out as one of the strongest value stocks in the market.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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