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Zacks.com featured highlights: CBRE Group, East West Bancorp, Hasbro, Canadian Pacific Railway and Masimo

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For Immediate Release

Chicago, IL –August 29, 2017 - Stocks in this week’s article include CBRE Group Inc.(NYSE:CBG Free Report), East West Bancorp Inc. (NASDAQ:EWBC Free Report), Hasbro Inc. (NASDAQ:HAS Free Report), Canadian Pacific Railway Limited (NYSE:(CP - Free Report) – Free Report) and Masimo Corporation (NASDAQ:MASI Free Report).

5 GARP Stocks to Buy for Magnificent Returns

Growth at a reasonable price or GARP is an excellent strategy for investors looking for healthy returns. It helps an investor gain exposure to stocks that are undervalued and have impressive prospects.

However, one should not confuse GARP investing with the blend strategy. While the blend strategy promotes investment in both value and growth stocks, GARP investing requires both value and growth features in a single stock.

GARP Metrics – Mix of Growth & Value Metrics

The GARP approach prefers stocks that are 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

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, picking stocks with a more stable and reasonable growth rate is a preferred tactic of GARP investors. Hence, growth rates between 10% and 20% are considered ideal under the strategy.

Another growth metric that is considered by both growth and GARP investors is return on equity (ROE). GARP investors look for strong and higher ROE compared to the industry average to identify superior stocks. Moreover, stocks with positive cash flow find precedence under the GARP plan.

Value Metrics

GARP investing gives priority to one of the popular value metrics – price-to-earnings (P/E) ratio. Though this investing style picks stocks with higher P/E ratios compared to value investors, it avoids companies with extremely high P/E ratios. Moreover, the price-to-book value (P/B) ratio is another value metric that is considered.

Using the GARP principle, we have run 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 favorable Zacks Rank #1 (Strong Buy) or 2 (Buy).

Last 5-year EPS & projected 3–5 year EPS growth rates between 10% and 20% (Strong EPS growth history and prospects ensure improving business.)

ROE (over the past 12 months) greater than the industry average (Higher ROE compared to the industry average indicates superior stocks.)

P/E and P/B ratios less than M-industry average (P/E and P/B ratios less than that of the industry indicates that the stocks are undervalued.)

These few criteria have narrowed down the universe of over 7,700 stocks to only 12.

Here are five stocks that made it through the screen:

Los Angeles CA-based CBRE Group Inc. (NYSE:CBGFree Report) operates as a commercial real estate services and investment company. It has an average four-quarter positive earnings surprise of 18.71% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Pasadena, CA-based East West Bancorp Inc. (NASDAQ:EWBCFree Report) is the holding company for East West Bank, East West Capital Trust I, East West Capital Trust II and Risk Services Inc. The company has an average four-quarter positive earnings surprise of 8.63% and carries a Zacks Rank #2.

Headquartered in Calgary, Canada, Canadian Pacific Railway Limited (NYSE:CPFree Report) operates a transcontinental railway network in Canada and the United States. The company focuses on providing logistics and supply chain expertise services. The company carries a Zacks Rank #2.

Pawtucket, RI-based Hasbro Inc. (NASDAQ:HASFree Report) is engaged in the design, manufacture and marketing of games and toys. The company has a Zacks Rank #2 and an average four-quarter positive earnings surprise of 19.06%.

Irvine, CA-based Masimo Corporation (NASDAQ:MASIFree Report) develops, manufactures and markets a family of non-invasive monitoring systems. The company has an average four-quarter positive earnings surprise of 8.11% and carries a Zacks Rank #2.

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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. Each week, Zacks Profit from the Pros free email newsletter shares a new screening strategy. Learn more about it here https://at.zacks.com/?id=112

 

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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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