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Zacks.com featured highlights include: Molson Coors Beverage, Whirlpool, Snap-on, Kroger and Laboratory Corporation of America

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Zacks Equity Research
·5 min read
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For Immediate Release

Chicago, IL – November 13, 2020 – Stocks in this week’s article are Molson Coors Beverage Company TAP, Whirlpool Corporation WHR, Snap-on Incorporated SNA, The Kroger Co. KR and Laboratory Corporation of America Holdings LH.

5 Excellent PEG Stocks for GARP Investors

In a market hurt by external shocks, equity investments need to be properly hedged. A question that arises frequently is whether one should resort to a value strategy that seeks discounted stocks or opt for growth investing in times of extreme market instability.

The investing track of the Oracle of Omaha over the past few decades and his gradual shift from being a pure-play value investor to a GARP (growth at a reasonable price) investor might give us all the answers.

In this regard, we should take note that strategic mingling of both growth and value investing principles gives us a mixed investing strategy that is getting popular with each passing day. What GARPers look for is whether the stocks are somewhat undervalued and have solid sustainable growth potential (Investopedia).

And here comes the importance of a not-so-popular fundamental metric, 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 ratio with future earnings growth rate.

While P/E alone only gives the idea of stocks, which are trading at a discount, PEG while adding the GROWTH element in it, helps finding those stocks that have solid future potential.

A lower PEG ratio is always better for investors.

Unfortunately, this ratio is often neglected due to investors' limitation to calculate the future earnings growth rate of a stock.

There are some drawbacks to using the PEG ratio though. It doesn't consider the very common situation of changing growth rates such as the forecast of the first three years at very high growth rates followed by a sustainable but lower growth rate in the long term.

Hence, PEG-based investing can turn out to be even more rewarding if some other relevant parameters are also taken into consideration.

For the rest of this Screen of the Week article please visit Zacks.com at:  https://www.zacks.com/stock/news/1100881/5-excellent-peg-stocks-for-garp-investors

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.

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Whirlpool Corporation (WHR) : Free Stock Analysis Report
 
SnapOn Incorporated (SNA) : Free Stock Analysis Report
 
Molson Coors Beverage Company (TAP) : Free Stock Analysis Report
 
Laboratory Corporation of America Holdings (LH) : Free Stock Analysis Report
 
The Kroger Co. (KR) : Free Stock Analysis Report
 
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