We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Scoop Up These 4 GARP Stocks to Net Handsome Returns
Read MoreHide Full Article
If you are looking for a profitable portfolio of stocks offering the best value and growth investing, try the growth at a reasonable price or GARP strategy.
The strategy helps investors gain exposure to undervalued stocks with impressive prospects. Unlike a blend strategy, a portfolio that uses GARP investing is expected to include stocks that offer the best of both value and growth investing. W.W. Grainger (GWW - Free Report) , FMC Corp (FMC - Free Report) , UBS Group AG (UBS - Free Report) and A.O. Smith (AOS - Free Report) 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 prefer buying stocks priced below the market or any reasonable target determined by fundamental analysis. These stocks also have solid prospects in terms of cash flow, revenues, earnings per share (EPS) and so on.
Growth Metrics
Both 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 that both growth and GARP investors consider is the return on equity (ROE). GARP investors look for a strong and higher ROE than the industry average to identify superior stocks. Moreover, stocks with positive cash flows find precedence under the GARP plan.
Value Metrics
GARP investing prioritizes the popular value metrics — the price-to-earnings (P/E) and price-to-book (P/B) ratios. Though this investing style picks stocks with higher P/E ratios compared to value investors, it avoids companies with extremely high P/E ratios.
Using the GARP principle, we ran a screen to identify stocks that should offer solid returns in the near term.
Screening Parameters
Along with the criteria discussed in the above section, we have considered a Zacks Rank #1 (Strong Buy) or 2 (Buy).
Last 5-year EPS & projected 3-5-year EPS growth rates between 5% and 20% (Strong EPS growth history and prospects ensure improving business.)
ROE (over the past 12 months) greater than the industry average (Higher ROE than the industry average indicates superior stocks.)
P/E and P/B ratios less than the M-industry average (P/E and P/B ratios less than that of the industry indicate that the stocks are undervalued.)
Here are four of the six stocks that made it through the screening process:
W.W. Grainger is a broad-line, business-to-business distributor of maintenance, repair and operating products and services primarily in North America, Japan and the U.K. The company currently carries a Zacks Rank #2. You can see the complete list of today's Zacks #1 Rank stocks here.
W.W. Grainger has a trailing four-quarter earnings surprise of 10.1%, on average. The Zacks Consensus Estimate for W.W. Grainger’s 2023 earnings has moved 0.3% north to $30.69 per share over the past 30 days.
FMC is an agricultural sciences company offering innovative solutions to farmers globally. It has a robust product portfolio and a development pipeline in crop protection, plant health, and professional pest and turf management. The company currently carries a Zacks Rank #2.
FMC has a trailing four-quarter earnings surprise of 7.89%, on average. The Zacks Consensus Estimate for FMC’s 2023 earnings has moved 0.6% north to $8.34 per share over the past 30 days.
UBS Group AG is the holding company of UBS Group, which offers wealth and asset management solutions, investment banking and capital markets services, and foreign exchange services, as well as corporate, human resources, finance, legal, risk control, compliance, regulatory and governance services. The company currently carries a Zacks Rank #2.
UBS Group AG has a trailing four-quarter earnings surprise of 22.4%, on average. The Zacks Consensus Estimate for UBS' 2023 earnings has moved 1.5% north to $2.08 per share over the past 30 days.
A.O. Smith is one of the leading manufacturers of commercial and residential water heating equipment and water treatment products in the world. The company currently carries a Zacks Rank #2.
A.O. Smith has a trailing four-quarter earnings surprise of 4.22%, on average. The Zacks Consensus Estimate for AOS’ 2023 earnings has been unchanged at $3.20 per share over the past 30 days.
Get the remaining stocks on the list and start putting this and other ideas to the test. It can all be done with the Research Wizard stock picking and back testing software.
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.
Image: Bigstock
Scoop Up These 4 GARP Stocks to Net Handsome Returns
If you are looking for a profitable portfolio of stocks offering the best value and growth investing, try the growth at a reasonable price or GARP strategy.
The strategy helps investors gain exposure to undervalued stocks with impressive prospects. Unlike a blend strategy, a portfolio that uses GARP investing is expected to include stocks that offer the best of both value and growth investing. W.W. Grainger (GWW - Free Report) , FMC Corp (FMC - Free Report) , UBS Group AG (UBS - Free Report) and A.O. Smith (AOS - Free Report) 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 prefer buying stocks priced below the market or any reasonable target determined by fundamental analysis. These stocks also have solid prospects in terms of cash flow, revenues, earnings per share (EPS) and so on.
Growth Metrics
Both 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 that both growth and GARP investors consider is the return on equity (ROE). GARP investors look for a strong and higher ROE than the industry average to identify superior stocks. Moreover, stocks with positive cash flows find precedence under the GARP plan.
Value Metrics
GARP investing prioritizes the popular value metrics — the price-to-earnings (P/E) and price-to-book (P/B) ratios. Though this investing style picks stocks with higher P/E ratios compared to value investors, it avoids companies with extremely high P/E ratios.
Using the GARP principle, we ran a screen to identify stocks that should offer solid returns in the near term.
Screening Parameters
Along with the criteria discussed in the above section, we have considered a Zacks Rank #1 (Strong Buy) or 2 (Buy).
Last 5-year EPS & projected 3-5-year EPS growth rates between 5% and 20% (Strong EPS growth history and prospects ensure improving business.)
ROE (over the past 12 months) greater than the industry average (Higher ROE than the industry average indicates superior stocks.)
P/E and P/B ratios less than the M-industry average (P/E and P/B ratios less than that of the industry indicate that the stocks are undervalued.)
Here are four of the six stocks that made it through the screening process:
W.W. Grainger is a broad-line, business-to-business distributor of maintenance, repair and operating products and services primarily in North America, Japan and the U.K. The company currently carries a Zacks Rank #2. You can see the complete list of today's Zacks #1 Rank stocks here.
W.W. Grainger has a trailing four-quarter earnings surprise of 10.1%, on average. The Zacks Consensus Estimate for W.W. Grainger’s 2023 earnings has moved 0.3% north to $30.69 per share over the past 30 days.
FMC is an agricultural sciences company offering innovative solutions to farmers globally. It has a robust product portfolio and a development pipeline in crop protection, plant health, and professional pest and turf management. The company currently carries a Zacks Rank #2.
FMC has a trailing four-quarter earnings surprise of 7.89%, on average. The Zacks Consensus Estimate for FMC’s 2023 earnings has moved 0.6% north to $8.34 per share over the past 30 days.
UBS Group AG is the holding company of UBS Group, which offers wealth and asset management solutions, investment banking and capital markets services, and foreign exchange services, as well as corporate, human resources, finance, legal, risk control, compliance, regulatory and governance services. The company currently carries a Zacks Rank #2.
UBS Group AG has a trailing four-quarter earnings surprise of 22.4%, on average. The Zacks Consensus Estimate for UBS' 2023 earnings has moved 1.5% north to $2.08 per share over the past 30 days.
A.O. Smith is one of the leading manufacturers of commercial and residential water heating equipment and water treatment products in the world. The company currently carries a Zacks Rank #2.
A.O. Smith has a trailing four-quarter earnings surprise of 4.22%, on average. The Zacks Consensus Estimate for AOS’ 2023 earnings has been unchanged at $3.20 per share over the past 30 days.
Get the remaining stocks on the list and start putting this and other ideas to the test. It can all be done with the Research Wizard stock picking and back testing software.
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.
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.
Disclosure: Performance information for Zacks' portfolios and strategies are available at: https://www.zacks.com/performance.