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4 PEG-Based GARP Stocks for Navigating Early 2026 Market Uncertainty
U.S. equities began the year 2026 at record highs, with the Dow Jones Industrial Average surpassing 49,000 and the S&P 500 also setting new peaks. While the rally reflects strong earnings expectations and continued momentum in AI-driven growth themes, investor confidence remains tempered by elevated valuations and uncertainty around the Federal Reserve's policy path. With an unclear rate-cut scenario and inflation above target, markets remain highly sensitive to economic indicators releases and earnings surprises, supporting a "priced-for-perfection" backdrop despite the strong start to the year.
Against this backdrop of record equity levels paired with fragile confidence, traditional defensive investments are proving less reliable. Pure value strategies struggle to keep pace in a market still driven by secular growth narratives, while high-beta growth stocks remain vulnerable to sharp drawdowns amid valuation sensitivity and macro surprises. In such an environment, neither extreme offers consistent downside protection, making a balanced, hybrid approach particularly compelling.
Per the GARP theory, the strategic mingling of growth and value-investing principles gives us a hybrid strategy, offering an ideal investment by utilizing the best features of both. What GARPers look for is whether or not the stocks are somewhat undervalued and have solid, sustainable growth potential (Investopedia).
Several stocks that have surged significantly in recent years have demonstrated the overwhelming success of this hybrid investing strategy over pure-play value and growth investments. Here, we will discuss the success of four such stocks. These are Phibro Animal Health, Commercial Metals, Fox and Adtalem Global Education Inc..
A Few More Words on GARP
GARP investing gives priority to one of the popular value metrics, the price/earnings growth (PEG) ratio. Although it is categorized under value investing, this strategy follows the principles of both growth and value investing.
The PEG ratio is defined as (Price/Earnings)/Earnings Growth Rate.
It relates the stocks' P/E ratios to the future earnings growth rates.
While P/E alone gives an idea of stocks that are trading at a discount, PEG, while adding the growth element to it, helps identify stocks with solid future potential.
A lower PEG ratio, preferably less than 1, is always better for GARP investors.
Say, for example, if a stock's P/E ratio is 10 and the expected long-term growth rate is 15%, the company's PEG will come down to 0.66, a ratio indicating both undervaluation and future growth potential.
Unfortunately, this ratio is often neglected due to investors' limitations in calculating the future earnings growth rate of a stock.
However, there are some drawbacks to using the PEG ratio. It does not consider the very common situation of changing growth rates, such as the forecast of the first three years at a very high growth rate, followed by a sustainable but lower growth rate over the long term.
Hence, PEG-based investing can be even more rewarding if some other relevant parameters are also taken into consideration.
Here are four stocks that qualified the screening:
Phibro: Headquartered in New Jersey, Phibro Animal Health is a leading global diversified animal health and mineral nutrition company. The company provides a broad range of products for food animals, including poultry, swine, beef and dairy cattle, and aquaculture. In addition, Phibro manufactures and markets specific ingredients for use in the personal care, automotive, industrial chemical and chemical catalyst industries.
Phibrocan be an impressive GARP investment pick with its Zacks Rank #2, Value Score of A and a Growth score of A. Apart from a discounted PEG and P/E, the stock has an impressive long-term expected growth rate of 12.8%.
Commercial Metals: Irving, TX- based Commercial Metals Company manufactures, recycles and markets steel and metal products, related materials and services. It provides these through a network of facilities that include seven electric arc furnace ("EAF") mini mills, two EAF micro mills, a rerolling mill, steel fabrication and processing plants, construction-related product warehouses and metal recycling facilities in the United States and Poland.
CMC stock can also be an impressive GARP investment pick with its Zacks Rank #1, a Value Score of B and a Growth Score of B. Apart from a discounted PEG and P/E, Commercial Metals has a solid long-term expected growth rate of 25.6%.
Fox: It is a U.S. news, sports, and entertainment company operating across Cable Network Programming, Television, Credible, and the FOX Studio Lot. It produces and distributes news, sports, and entertainment content via cable, broadcast and digital platforms, including FOX and Tubi.
FOX stock can be an impressive GARP investment pick with its Zacks Rank #2 and a Value Score of A and a Growth Score of B. Apart from a discounted PEG and P/E, FOX also has an impressive long-term historical growth rate of 12.3%.
Adtalem: The company provides healthcare-focused education in the United States and the Caribbean through its Chamberlain, Walden, and Medical and Veterinary segments. It offers degree, non-degree, and online certificate programs across nursing, health professions, medicine, veterinary studies and related fields.
Adtalem can also be an impressive GARP investment pick with its Zacks Rank #2, a Value Score of A and a Growth Score of A. Apart from a discounted PEG and P/E, the stock also has a solid long-term expected growth rate of 19.6%.
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 Animal Health, Commercial Metals, Fox and Adtalem Global Education
For Immediate Release
Chicago, IL – January 8, 2026 – Stocks in this week’s article are Animal Health (PAHC - Free Report) , Commercial Metals (CMC - Free Report) , Fox (FOX - Free Report) and Adtalem Global Education Inc. (ATGE - Free Report) .
4 PEG-Based GARP Stocks for Navigating Early 2026 Market Uncertainty
U.S. equities began the year 2026 at record highs, with the Dow Jones Industrial Average surpassing 49,000 and the S&P 500 also setting new peaks. While the rally reflects strong earnings expectations and continued momentum in AI-driven growth themes, investor confidence remains tempered by elevated valuations and uncertainty around the Federal Reserve's policy path. With an unclear rate-cut scenario and inflation above target, markets remain highly sensitive to economic indicators releases and earnings surprises, supporting a "priced-for-perfection" backdrop despite the strong start to the year.
Against this backdrop of record equity levels paired with fragile confidence, traditional defensive investments are proving less reliable. Pure value strategies struggle to keep pace in a market still driven by secular growth narratives, while high-beta growth stocks remain vulnerable to sharp drawdowns amid valuation sensitivity and macro surprises. In such an environment, neither extreme offers consistent downside protection, making a balanced, hybrid approach particularly compelling.
Per the GARP theory, the strategic mingling of growth and value-investing principles gives us a hybrid strategy, offering an ideal investment by utilizing the best features of both. What GARPers look for is whether or not the stocks are somewhat undervalued and have solid, sustainable growth potential (Investopedia).
Several stocks that have surged significantly in recent years have demonstrated the overwhelming success of this hybrid investing strategy over pure-play value and growth investments. Here, we will discuss the success of four such stocks. These are Phibro Animal Health, Commercial Metals, Fox and Adtalem Global Education Inc..
A Few More Words on GARP
GARP investing gives priority to one of the popular value metrics, the price/earnings growth (PEG) ratio. Although it is categorized under value investing, this strategy follows the principles of both growth and value investing.
The PEG ratio is defined as (Price/Earnings)/Earnings Growth Rate.
It relates the stocks' P/E ratios to the future earnings growth rates.
While P/E alone gives an idea of stocks that are trading at a discount, PEG, while adding the growth element to it, helps identify stocks with solid future potential.
A lower PEG ratio, preferably less than 1, is always better for GARP investors.
Say, for example, if a stock's P/E ratio is 10 and the expected long-term growth rate is 15%, the company's PEG will come down to 0.66, a ratio indicating both undervaluation and future growth potential.
Unfortunately, this ratio is often neglected due to investors' limitations in calculating the future earnings growth rate of a stock.
However, there are some drawbacks to using the PEG ratio. It does not consider the very common situation of changing growth rates, such as the forecast of the first three years at a very high growth rate, followed by a sustainable but lower growth rate over the long term.
Hence, PEG-based investing can be even more rewarding if some other relevant parameters are also taken into consideration.
Here are four stocks that qualified the screening:
Phibro: Headquartered in New Jersey, Phibro Animal Health is a leading global diversified animal health and mineral nutrition company. The company provides a broad range of products for food animals, including poultry, swine, beef and dairy cattle, and aquaculture. In addition, Phibro manufactures and markets specific ingredients for use in the personal care, automotive, industrial chemical and chemical catalyst industries.
Phibrocan be an impressive GARP investment pick with its Zacks Rank #2, Value Score of A and a Growth score of A. Apart from a discounted PEG and P/E, the stock has an impressive long-term expected growth rate of 12.8%.
You can see the complete list of today's Zacks #1 Rank stocks here.
Commercial Metals: Irving, TX- based Commercial Metals Company manufactures, recycles and markets steel and metal products, related materials and services. It provides these through a network of facilities that include seven electric arc furnace ("EAF") mini mills, two EAF micro mills, a rerolling mill, steel fabrication and processing plants, construction-related product warehouses and metal recycling facilities in the United States and Poland.
CMC stock can also be an impressive GARP investment pick with its Zacks Rank #1, a Value Score of B and a Growth Score of B. Apart from a discounted PEG and P/E, Commercial Metals has a solid long-term expected growth rate of 25.6%.
Fox: It is a U.S. news, sports, and entertainment company operating across Cable Network Programming, Television, Credible, and the FOX Studio Lot. It produces and distributes news, sports, and entertainment content via cable, broadcast and digital platforms, including FOX and Tubi.
FOX stock can be an impressive GARP investment pick with its Zacks Rank #2 and a Value Score of A and a Growth Score of B. Apart from a discounted PEG and P/E, FOX also has an impressive long-term historical growth rate of 12.3%.
Adtalem: The company provides healthcare-focused education in the United States and the Caribbean through its Chamberlain, Walden, and Medical and Veterinary segments. It offers degree, non-degree, and online certificate programs across nursing, health professions, medicine, veterinary studies and related fields.
Adtalem can also be an impressive GARP investment pick with its Zacks Rank #2, a Value Score of A and a Growth Score of A. Apart from a discounted PEG and P/E, the stock also has a solid long-term expected growth rate of 19.6%.
For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/2813763/4-peg-based-garp-picks-for-navigating-early-2026-market-uncertainty
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
Phone: 312-265-9268
Email: pr@zacks.com
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.