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Growth at a reasonable price or GARP is an excellent strategy to earn quick profits from investments. The GARP approach helps identify stocks that are priced below the market or any reasonable target determined by fundamental analysis.
The strategy helps investors gain exposure to stocks that have impressive prospects and are trading at a discount. GARP stocks have solid prospects in terms of cash flow, revenues, earnings per share (EPS) and others.
Therefore, a portfolio created on the basis of the GARP strategy contains stocks that offer the best value and growth investing. RPM International, W.W. Grainger, Grand Canyon Education and Texas Roadhouse are some GARP stocks that hold promise.
GARP Metrics — Mix of Growth & Value Metrics
The GARP strategy seeks to offer an ideal investment by utilizing the best features of both value and growth investing. Investors adopting the GARP approach will prefer to buy stocks that are priced below the market or any reasonable target determined by fundamental analysis. The stocks have solid prospects in terms of cash flow, revenues, EPS and others.
Growth Metrics
A strong earnings growth history and impressive earnings prospects are the main concepts that GARP investors borrow from the growth investing strategy. However, instead of super-normal growth rates, pursuing stocks with a more stable and reasonable growth rate is a tactic of GARP investors. Hence, growth rates between 5% and 20% are considered ideal under the GARP strategy.
Another growth metric considered by both growth and GARP investors is return on equity (ROE). GARP investors look for strong and higher ROE than the industry average to identify superior stocks. Moreover, stocks with a positive cash flow find precedence under the GARP plan.
Value Metrics
GARP investing prioritizes one of the popular value metrics — the price-to-earnings (P/E) ratio. Though the investing style picks stocks with higher P/E ratios than value investors, it avoids companies with extremely high P/E ratios. The price-to-book value (P/B) ratio is also considered.
Using the GARP principle, we have run a screen to identify stocks that should offer solid returns in the near term.
Here are four stocks that made it through the screen:
RPM International manufactures and markets high-performance coatings, sealants and specialty chemicals, primarily for maintenance and improvement applications. RPM currently sports a Zacks Rank #1. You can see the complete list of today's Zacks #1 Rank stocks here.
RPM has a trailing four-quarter earnings surprise of 7.34%, on average. The Zacks Consensus Estimate for RPM's fiscal 2023 earnings has moved 2.4% north to $4.60 per share over the past 30 days.
W.W. Grainger is a broad-line, business-to-business distributor of maintenance, repair and operating products and services, operating primarily in North America, Japan and the U.K. The company currently carries a Zacks Rank #2.
W.W. Grainger has a trailing four-quarter earnings surprise of 10.1%, on average. The Zacks Consensus Estimate for W.W. Grainger's 2022 earnings has moved 4.1% north to $29.31 per share over the past 30 days.
Grand Canyon Education is an accredited provider of online post-secondary education services focused on offering graduate and undergraduate degree programs in its core disciplines of education, business and healthcare. The company currently carries a Zacks Rank #2.
Grand Canyon Education has a trailing four-quarter earnings surprise of 4.79%, on average. The Zacks Consensus Estimate for LOPE's 2022 earnings has moved 3.9% north to $5.85 per share over the past 30 days.
Texas Roadhouse is a full-service, casual dining restaurant chain, which offers an assortment of specially seasoned and aged steaks on the premises and cooked to order over open grills. The company currently carries a Zacks Rank #2.
Texas Roadhouse has a trailing four-quarter earnings surprise of 11.24%, on average. The Zacks Consensus Estimate for 2022 earnings has moved 4.6% north to $4.07 per share over the past 30 days.
The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in, and see what gems come out.
Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
About Screen of the Week
Zacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine. But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has more than doubled the market from 1988 through 2016. Its average gain has been a stellar +25% per year. See these high-potential stocks free >>.
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
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Zacks.com featured highlights include RPM International, W.W. Grainger, Grand Canyon Education and Texas Roadhouse
For Immediate Release
Chicago, IL – November 25, 2022 – Stocks in this week’s article are RPM International (RPM - Free Report) , W.W. Grainger (GWW - Free Report) , Grand Canyon Education (LOPE - Free Report) and Texas Roadhouse (TXRH - Free Report) .
4 GARP Stocks to Scoop Up for Maximum Returns
Growth at a reasonable price or GARP is an excellent strategy to earn quick profits from investments. The GARP approach helps identify stocks that are priced below the market or any reasonable target determined by fundamental analysis.
The strategy helps investors gain exposure to stocks that have impressive prospects and are trading at a discount. GARP stocks have solid prospects in terms of cash flow, revenues, earnings per share (EPS) and others.
Therefore, a portfolio created on the basis of the GARP strategy contains stocks that offer the best value and growth investing. RPM International, W.W. Grainger, Grand Canyon Education and Texas Roadhouse are some GARP stocks that hold promise.
GARP Metrics — Mix of Growth & Value Metrics
The GARP strategy seeks to offer an ideal investment by utilizing the best features of both value and growth investing. Investors adopting the GARP approach will prefer to buy stocks that are priced below the market or any reasonable target determined by fundamental analysis. The stocks have solid prospects in terms of cash flow, revenues, EPS and others.
Growth Metrics
A strong earnings growth history and impressive earnings prospects are the main concepts that GARP investors borrow from the growth investing strategy. However, instead of super-normal growth rates, pursuing stocks with a more stable and reasonable growth rate is a tactic of GARP investors. Hence, growth rates between 5% and 20% are considered ideal under the GARP strategy.
Another growth metric considered by both growth and GARP investors is return on equity (ROE). GARP investors look for strong and higher ROE than the industry average to identify superior stocks. Moreover, stocks with a positive cash flow find precedence under the GARP plan.
Value Metrics
GARP investing prioritizes one of the popular value metrics — the price-to-earnings (P/E) ratio. Though the investing style picks stocks with higher P/E ratios than value investors, it avoids companies with extremely high P/E ratios. The price-to-book value (P/B) ratio is also considered.
Using the GARP principle, we have run a screen to identify stocks that should offer solid returns in the near term.
Here are four stocks that made it through the screen:
RPM International manufactures and markets high-performance coatings, sealants and specialty chemicals, primarily for maintenance and improvement applications. RPM currently sports a Zacks Rank #1. You can see the complete list of today's Zacks #1 Rank stocks here.
RPM has a trailing four-quarter earnings surprise of 7.34%, on average. The Zacks Consensus Estimate for RPM's fiscal 2023 earnings has moved 2.4% north to $4.60 per share over the past 30 days.
W.W. Grainger is a broad-line, business-to-business distributor of maintenance, repair and operating products and services, operating primarily in North America, Japan and the U.K. The company currently carries a Zacks Rank #2.
W.W. Grainger has a trailing four-quarter earnings surprise of 10.1%, on average. The Zacks Consensus Estimate for W.W. Grainger's 2022 earnings has moved 4.1% north to $29.31 per share over the past 30 days.
Grand Canyon Education is an accredited provider of online post-secondary education services focused on offering graduate and undergraduate degree programs in its core disciplines of education, business and healthcare. The company currently carries a Zacks Rank #2.
Grand Canyon Education has a trailing four-quarter earnings surprise of 4.79%, on average. The Zacks Consensus Estimate for LOPE's 2022 earnings has moved 3.9% north to $5.85 per share over the past 30 days.
Texas Roadhouse is a full-service, casual dining restaurant chain, which offers an assortment of specially seasoned and aged steaks on the premises and cooked to order over open grills. The company currently carries a Zacks Rank #2.
Texas Roadhouse has a trailing four-quarter earnings surprise of 11.24%, on average. The Zacks Consensus Estimate for 2022 earnings has moved 4.6% north to $4.07 per share over the past 30 days.
The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in, and see what gems come out.
Click here to sign up for a free trial to the Research Wizard today.
For the rest of this Screen of the Week article please visit Zacks.com at:
https://www.zacks.com/stock/news/2021267/4-garp-stocks-to-scoop-up-for-maximum-returns
Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
About Screen of the Week
Zacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine. But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has more than doubled the market from 1988 through 2016. Its average gain has been a stellar +25% per year. See these high-potential stocks free >>.
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Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Contact: Jim Giaquinto
Company: Zacks.com
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Visit: https://www.zacks.com/
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.