For Immediate Release
Chicago, IL – April 5, 2022 – Stocks in this week’s article are East West Bancorp EWBC, Automatic Data Processing ADP, CDW Corp. CDW, and Qualcomm QCOM
4 GARP Stocks to Scoop Up for Maximum Returns
Growth at a reasonable price, or GARP, is an excellent strategy to earn quick profits out of investments. The GARP approach leads to the identification of stocks that are priced below the market or any reasonable target determined by fundamental analysis.
Further, the strategy helps investors in gaining exposure to stocks that have impressive prospects and are trading at a discount. GARP stocks also have solid prospects in terms of cash flow, revenues, earnings per share (EPS) and so on.
That means a portfolio created on the basis of GARP strategy is expected to have stocks that offer the best of both value and growth investing.
GARP Metrics – Mix of Growth & Value Metrics
The GARP strategy seeks to offer an ideal investment by utilizing the best features of both value and growth investing. Investors adopting the GARP approach will prefer to buy stocks that are priced below the market or any reasonable target determined by fundamental analysis. These stocks also have solid prospects in cash flow, revenues, earnings per share (EPS) and so on.
Both 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, pursuing stocks with a more stable and reasonable growth rate is also a tactic of GARP investors. Hence, growth rates between 10% and 20% are considered ideal under the GARP 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.
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 also considered.
Using the GARP principle, we have run a screen to identify stocks that should offer solid returns in the near term.
Here are four stocks that made it through the screen:
East West Bancorp serves as a financial bridge between the United States and Greater China by providing various personal and commercial banking services to small and medium-sized businesses, business executives, professionals, and other individuals. The company currently carries a Zacks Rank #2. You can see the complete list of today's Zacks #1 Rank stocks here.
East West Bancorp has a trailing four-quarter earnings surprise of 8.39%, on average. The stock has gained 5.4% over a year.
Automatic Data Processing is a provider of cloud-based Human Capital Management technology solutions, including payroll, talent management, Human Resources and benefits administration, and time and attendance management. The company carries a Zacks Rank #2.
Automatic Data Processing has a trailing four-quarter earnings surprise of 5.5%, on average. The stock has appreciated 20.9% over a year.
CDW Corp. is a leading provider of integrated information technology (IT) solutions to small, medium and large business, government, education and healthcare customers. The company carries a Zacks Rank #2 currently.
CDW has a trailing four-quarter earnings surprise of 9.8%, on average. The stock has increased 3.7% over a year.
Qualcomm designs, manufactures and markets digital wireless telecom products and services based on the Code Division Multiple Access technology. The company carries a Zacks Rank #2 currently.
Qualcomm has a trailing four-quarter earnings surprise of 12.22%, on average. The stock has climbed 4.7% over a year.
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For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/1892093/4-garp-stocks-to-scoop-up-for-maximum-returns
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QUALCOMM Incorporated (QCOM) : Free Stock Analysis Report
Automatic Data Processing, Inc. (ADP) : Free Stock Analysis Report
East West Bancorp, Inc. (EWBC) : Free Stock Analysis Report
CDW Corporation (CDW) : Free Stock Analysis Report
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