4 Lucrative PEG Stocks Based on GARP Investment Strategy

Core Insights - The article discusses the effectiveness of a hybrid investing strategy known as GARP (Growth at a Reasonable Price), which combines elements of both value and growth investing to navigate market uncertainties [2][4]. Group 1: GARP Strategy - GARP investing focuses on stocks that are undervalued while also having solid sustainable growth potential, utilizing the price/earnings growth (PEG) ratio as a key metric [4][5]. - A lower PEG ratio, ideally less than 1, indicates both undervaluation and future growth potential, making it attractive for GARP investors [6]. Group 2: Screening Criteria - Successful GARP investing involves several screening criteria, including a PEG ratio less than the industry median, a P/E ratio below the industry median, and a Zacks Rank of 1 (Strong Buy) or 2 (Buy) [8][9]. - Additional criteria include a market capitalization greater than $1 billion, an average 20-day volume exceeding 50,000, and a percentage change in F1 earnings estimate revisions greater than 5% [9]. Group 3: Stock Picks - Subaru Corporation (FUJHY) is highlighted as a strong investment pick with a Zacks Rank of 2, a Value Score of A, and a long-term expected earnings growth rate of 24.6% [10][11]. - Enersys (ENS) also qualifies as a solid investment with a Zacks Rank of 2, a Value Score of A, and a long-term expected growth rate of 18% [12]. - Nomura Holdings, Inc. (NMR) is noted for its Zacks Rank of 2, a Value Score of A, and a projected earnings growth rate of 22.6% over the next five years [13]. - American Airlines (AAL) stands out with a Zacks Rank of 1, a Value Score of A, and an impressive long-term expected earnings growth rate of 37.6% [14].