U.S. equities began 2026 at record highs, but the narrative has shifted meaningfully since then. After the S&P 500 and Dow Jones Industrial Average reached new peaks early in the year, markets experienced a sharp pullback, approaching correction territory before rebounding in April. The recovery, however, has been uneven and volatility remains elevated, driven by geopolitical tensions, rising energy prices and a significant repricing of Federal Reserve expectations, with rate cuts now pushed further out. As a result, equities are no longer in a steady uptrend but are oscillating within a macro-sensitive range, reinforcing a fragile, “priced-for-perfection” backdrop despite resilient earnings expectations.

Against this backdrop of elevated yet unstable equity levels and 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 Antero Resources (AR Quick QuoteAR - Free Report) , Afya (AFYA Quick QuoteAFYA - Free Report) , Eni (E Quick QuoteE - Free Report) and Vista Energy (VIST Quick QuoteVIST - Free Report) .

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 the screening criteria for a winning strategy:

PEG Ratio less than X Industry Median

P/E Ratio (using F1) less than X Industry Median (For more accurate valuation purposes)

Zacks Rank of 1 (Strong Buy) or 2 (Buy) (Whether good market conditions or bad, stocks with a Zacks Rank #1 or #2 have a proven history of success.)

Market Capitalization greater than $1 Billion (This helps us to focus on companies that have strong liquidity.)

Average 20-Day Volume greater than 50,000: A substantial trading volume ensures that the stock is easily tradable.

Percentage Change F1 Earnings Estimate Revisions (4 Weeks) greater than 5%: Upward estimate revisions add to the optimism, suggesting further bullishness.

Value Score of less than or equal to B: Our research shows that stocks with a Value Style Score of A or B, when combined with a Zacks Rank #1, 2 or 3 (Hold), offer the best upside potential.

Our PEG-Driven Picks

Here are four stocks that qualified the screening:

Antero Resources: Denver, CO-based Antero Resources is an independent explorer, primarily engaged in the acquisition and development of natural gas, natural gas liquids and oil resources in the Appalachian Basin. It is one of the fast-growing natural gas producers in the United States. The company holds around 542,000 net acres of oil and gas properties in the Appalachian Basin in West Virginia and Ohio.

Antero Resources can be an impressive GARP investment pick with its Zacks Rank #2 and Value Score of A. Apart from a discounted PEG and P/E, the stock has an impressive long-term expected growth rate of 49.4%.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Afya: It operates a medical education platform in Brazil across the Undergraduate, Continuing Education and Medical Practice Solutions segments. It offers programs in medicine, health sciences and select non-health disciplines.

AFYA stock can also be an impressive GARP investment pick with its Zacks Rank #1 and a Value Score of B. Apart from a discounted PEG and P/E, the company has a solid long-term expected growth rate of 13.4%.

Eni: Based in Rome, Italy, Eni is among the leading integrated energy players in the world. The upstream operations include the exploitation and production of oil and natural gas resources. Through midstream activities, E transports and stores hydrocarbons. The company is also engaged in refining hydrocarbons and distributing the end products in 71 nations.

Eni stock can be an impressive GARP investment pick with its Zacks Rank #1 and a Value Score of A. Apart from a discounted PEG and P/E, E also has an impressive long-term expected growth rate of 38.5%.

Vista Energy: It is a leading exploration and production company with a strong footprint in Vaca Muerta – among the largest shale oil and gas resources outside of North America. Spanning 205,600 Vaca Muerta acres, the company has about 1,150 premium untapped drilling sites, highlighting a solid production outlook.

Vista Energy can also be an impressive GARP investment pick with its Zacks Rank #1 and a Value Score of A. Apart from a discounted PEG and P/E, VIST has a solid long-term expected growth rate of 8.8%.