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Should Value Investors Buy Greif (GEF) 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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One stock to keep an eye on is Greif (GEF). GEF is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 11.76 right now. For comparison, its industry sports an average P/E of 12.67. GEF's Forward P/E has been as high as 12.12 and as low as 8.14, with a median of 10.15, all within the past year.

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Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. GEF has a P/S ratio of 0.49. This compares to its industry's average P/S of 0.82.

Graphic Packaging Holding Company (GPK) may be another strong Containers - Paper and Packaging stock to add to your shortlist. GPK is a # 1 (Strong Buy) stock with a Value grade of A.

Graphic Packaging Holding Company is currently trading with a Forward P/E ratio of 8.52 while its PEG ratio sits at 0.34. Both of the company's metrics compare favorably to its industry's average P/E of 12.67 and average PEG ratio of 0.42.

GPK's price-to-earnings ratio has been as high as 10.28 and as low as 8.29, with a median of 9.03, while its PEG ratio has been as high as 0.41 and as low as 0.33, with a median of 0.36, all within the past year.

Furthermore, Graphic Packaging Holding Company holds a P/B ratio of 3.45 and its industry's price-to-book ratio is 8.07. GPK's P/B has been as high as 3.85, as low as 3.04, with a median of 3.40 over the past 12 months.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Greif and Graphic Packaging Holding Company are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, GEF and GPK feels like a great value stock at the moment.

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Greif, Inc. (GEF) : Free Stock Analysis Report

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

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Zacks Investment Research