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Zacks.com featured highlights include: Nexstar Media, Select Medical Holdings, Affiliated Managers Group, FedEx and Invesco

For Immediate Release

Chicago, IL – March 3, 2021 – Stocks in this week’s article are Nexstar Media Group, Inc. NXST, Select Medical Holdings Corporation SEM, Affiliated Managers Group, Inc. AMG, FedEx Corporation FDX and Invesco Ltd. IVZ.

5 Excellent GARP Stocks Based on Low PEG Ratio

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 find 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/1271891/5-excellent-garp-stocks-based-on-low-peg-ratio

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Invesco Ltd. (IVZ) : Free Stock Analysis Report
 
Affiliated Managers Group, Inc. (AMG) : Free Stock Analysis Report
 
Select Medical Holdings Corporation (SEM) : Free Stock Analysis Report
 
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