Home Sectors Consumer Cyclical Stock Analysis: Greif (NYSE: GEF)

Stock Analysis: Greif (NYSE: GEF)

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Greif trades as part of the consumer cyclical sector and is part of the packaging and containers industry. The company CEO is Peter G. Watson. Greif Inc produces industrial packaging products with manufacturing facilities located in over many countries. Its products are steel, fibre and plastic drums, intermediate bulk containers, closure systems for industrial packaging and among others.

Previous Intraday Trading Performance:

The GEF stock showed a previous change of -0.20% with an open at 35.33 and a close of 34.69. It reached an intraday high of 35.33 and a low of 34.07.

SeekingAlpha:  Greif, Inc. (GEF) CEO Pete Watson on Q2 2019 Results – Earnings Call Transcript

Liquidity:

The stock has a market cap of $2.1b with 59.3m shares outstanding, of which the float is 57.6m shares. Trading volume reached 318,911 shares compared to its average volume of 220,351 shares. Based on the current average volume and close price, the trading liquidity is bad, highly speculative and an investor may want to avoid this stock.

Historical Trading Performance:

Over the last five trading days, Greif shares returned -10.64% and in the past 30 trading days it returned -12.22%. Over three months, it changed -12.92%. In one year it has changed -38.43% and within that year its 52-week high was 59.48 and its 52-week low was 31.80. GEF stock is 9.09% above its 52 Week Low.

Our calculations show a 200 day moving average of 43.30 and a 50 day moving average of 38.28. Currently GEF stock is trading -19.88% below its 200 day moving average and may not be a good opportunity to buy as it may continue to trend down.

SeekingAlpha:  Greif, Inc. 2019 Q2 – Results – Earnings Call Slides

Earnings:

The last annual fiscal EPS for the company was reported at 3.55 that ended on 31st of October 2018, which according to the previous close, that is a PE of 9.77. Based on 5 analyst estimates, the consensus EPS for the next quarter is 0.64. The TTM EPS is 3.69, which comes to a TTM PE of 9.40. Historically, the PE high was 49.60 and the PE low was 9.40. GEF stock has set a new PE low record!

Below was the last reported quarterly diluted earnings per share:

Apr19 (Reported on 06/05/2019): 0.23
Jan19 (Reported on 02/27/2019): 0.51
Oct18 (Reported on 12/05/2018): 0.67
Jul18 (Reported on 08/29/2018): 1.15
Apr18 (Reported on 06/06/2018): 0.77

The dividend per share is currently 1.76, which is a dividend yield of 5.07%. Also, the payout ratio is 47.70%, therefore the dividend is safe according to our calculations. GEF stock has a high dividend yield, but because the company has sufficient earnings to cover future dividends, it may be a good investment opportunity for an income portfolio.

Base on our calculations, the intrinsic value per share is 56.78, which means it is possibly undervalued and has a margin of safety of 38.91%.

Indicators to Watch:

Based on the latest filings, there is 64.30% of institutional ownership. Short-interest was 1,687,618, which was 2.85% of shares outstanding. The short-interest ratio or days-to-cover ratio was 12.41. This stock has some short interest, but it may be normal and no cause for concern if long the position.

The current calculated beta is 1.45.

SeekingAlpha:  Greif, Inc. 2019 Q2 – Results – Earnings Call Slides

Fundamental Indicators:

Based on last reported financials, the company’s return on equity is 14.42%, return on assets is 3.51%, profit margin is 4.35%, price-to-sales is 0.50 and price-to-book is 1.90.

Company Scores:

All scores are out of six:
 5  :Valuation Score
 1  :Past Performance Score
 2  :Financial Strength Score
 4  :Future Growth Score
 6  :Dividend Score
 3  :Overall Score

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John Jones
Worked for several Wall Street firms: Salomon Smith Barney, UBS, and Charles Schwab. Has developed skills and gained extensive experience over the years that is used today to uncover winning penny stocks.Also was an attorney for small businesses in Scottsdale, Arizona. That experience and understanding of law provides a unique perspective and edge in discovering quality companies in various industries.

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