for immediate disclosure
Chicago, IL – Aug 10, 2022 – The stocks in this week’s article are Carlisle Companies CSL, East West Bancorp EWBC, WW Grainger GWW and Automatic Data Processing ADP.
4 GARP Stocks to Harvest for Maximum Returns
Growth at a reasonable price, or GARP, is an excellent strategy for making quick profits from investments. The GARP approach leads to the identification of stocks priced below market or any reasonable target determined by fundamental analysis.
The strategy helps investors gain exposure to stocks that have impressive prospects and are trading at a discount. GARP stocks have solid prospects in terms of cash flow, revenues, earnings per share (EPS) and so on.
Therefore, a portfolio created based on the GARP strategy is expected to have stocks that offer the best investment in value and growth. Carlisle Companies, East West Bank, WW Grainger and Automatic Data Processing are some promising GARP actions.
GARP Metrics – Combination of Growth and Value Metrics
The GARP strategy seeks to offer an optimal investment, utilizing the best investment characteristics in value and growth. Investors who take the GARP approach prefer to buy stocks at below market prices or any reasonable target determined by fundamental analysis. These stocks also have solid prospects in cash flow, revenue, earnings per share (EPS) and so on.
Both a strong track record of earnings growth and impressive earnings prospects are key concepts that GARP investors borrow from their growth investment strategy. However, instead of supernormal growth rates, chasing stocks with a more stable and reasonable growth rate is a GARP investor tactic. Thus, growth rates between 10% and 20% are considered optimal in the GARP strategy.
Another growth metric that is considered by growth investors and GARP is return on equity (ROE). GARP investors look for strong and higher ROE compared to the industry average to identify superior stocks. Also, cash flow positive stocks take precedence in the GARP plan.
GARP investing prioritizes one of the popular value metrics – the price-to-earnings (P/E) ratio. While this investment style chooses stocks with higher P/E ratios compared to value investors, it avoids companies with extremely high P/E ratios. The price-to-book value (P/B) ratio is also considered.
Using the GARP principle, we run a screen to identify stocks that should deliver solid returns in the short term.
Here are four of the seven actions that flashed across the screen:
Carlisle Companies is engaged in designing, manufacturing and selling a wide range of roofing and waterproofing products, engineering products and finishing equipment. CSL currently boasts a Zacks Rank of 1. You can see the full list of today’s Zacks #1 Rank stocks here.
Carlisle has a surprise four-quarter earnings of 6.78% on average. The Zacks Consensus Estimate for CSL’s 2022 earnings is up 14.6% to $20.22 per share over the past 30 days.
East West Bank serves as a financial bridge between the United States and Greater China, providing a variety of personal and commercial banking services for small and medium-sized businesses, business executives, professionals, and others. The company currently boasts a Zacks Rank #1.
East West Bancorp has a surprise four-quarter earnings of 4.74% on average. The Zacks Consensus Estimate for EWBC’s 2022 earnings is up 8.9% to $7.79 a share in the past 30 days.
WW Grainger is a full-line, business-to-business distributor of maintenance, repair and operation products and services, operating primarily in North America, Japan and the United Kingdom. Currently, the company has a Zacks Rank #2.
WW Grainger has a surprise four-quarter earnings of 7.95% on average. The Zacks Consensus Estimate for WW Grainger’s 2022 moved north by 5.9% to $27.84 per share in the last 30 days.
Automatic Data Processing provides cloud-based human capital management technology solutions, including payroll, talent management, human resources and benefits administration, and time and attendance management. The company currently carries a Zacks Rank #2.
Automated Data Processing has a surprise four-quarter earnings of 5.02% on average. The Zacks Consensus Estimate for fiscal 2023 earnings rose 3.5% to $8.04 per share in the past 30 days.
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For the rest of this Screen of the Week article, visit Zacks.com at: https://www.zacks.com/stock/news/1965915/4-garp-stocks-to-scoop-up-for-maximum-returns
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 mentioned in this material. An affiliated investment advisory firm may own or have shorted securities and/or hold long and/or short positions in options mentioned in this material.
About the week screen
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Contact: Jim Giaquinto
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Automatic Data Processing, Inc. (ADP): Free Inventory Analysis Report
WW Grainger, Inc. (GWW): Free Share Analysis Report
Carlisle Companies Incorporated (CSL): Free Share Analysis Report
East West Bankcorp, Inc. (EWBC): Free Share Analysis Report
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