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Zacks.com featured highlights include Carlisle Companies, East West Bancorp, W.W. Grainger and Automatic Data Processing
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For Immediate Release

Chicago, IL – August 10, 2022 – Stocks in this week’s article are Carlisle Companies CSL, East West Bancorp EWBC, W.W. Grainger GWW and Automatic Data Processing ADP.

4 GARP Stocks to Scoop Up for Maximum Returns

Growth at a reasonable price, or GARP, is an excellent strategy to earn quick profits from investments. The GARP approach leads to the identification of stocks that are priced below the 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 on the basis of the GARP strategy is expected to have stocks that offer the best of both value and growth investing. Carlisle Companies, East West Bancorp, W.W. Grainger and Automatic Data Processing are some GARP stocks that hold promise.

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.

Growth Metrics

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 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 with the industry average to identify superior stocks. Moreover, stocks with a positive cash flow find precedence under the GARP plan.

Value Metrics

GARP investing gives priority to one of the popular value metrics — the price-to-earnings (P/E) ratio. Though this investing style picks stocks with higher P/E ratios compared with 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 have run a screen to identify stocks that should offer solid returns in the near term.

Here are four of the seven stocks that made it through the screen:

Carlisle Companies is engaged in designing, manufacturing and selling a wide range of roofing and waterproofing products, engineered products, and finishing equipment. CSL currently flaunts a Zacks Rank of 1. You can see the complete list of today's Zacks #1 Rank stocks here.

Carlisle has a trailing four-quarter earnings surprise of 6.78%, on average. The Zacks Consensus Estimate for CSL's 2022 earnings has moved 14.6% north to $20.22 per share over the past 30 days.

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