Archive for the 'GARP' Category
September 7th, 2006
Large-cap growth finally coming good?
People have been talking up the prospects of large-cap growth stocks for some time now. Are they finally coming good?
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August 28th, 2006
Two GARP picks from Oak Associates
FundWatch: White Oak Select Growth Fund looks for growth companies at cheap prices. Most of its holdings are beaten-down growth …
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August 21st, 2006
A five-point health check for fallen growth stocks
The market is turning and many commentators say buy beaten-down growth stocks to make big profits. But investors should put …
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August 9th, 2006
A renaissance of growth stocks
Wedgewood Partners has suffered in the growth stock slump, which it describes as ‘the perfect storm for growth’. But the …
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July 24th, 2006
Three Canadian GARP picks
Canadian GARP investor Jennifer Law wants under-followed companies with great management in growing industries. Here are three of her favourite …
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July 19th, 2006
10 fallen growth stock gems
Oakmark’s Bill Nygren says fallen growth stocks are the place to invest right now. While a value investor his portfolio …
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June 15th, 2006
Growth guru (perhaps) picks
John Reese at Forbes has picked a number of stocks that gurus might want to own. He thinks William …
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June 15th, 2006
Momentum ‘players’ deliver acorns, McQuaid
The $18.5bn Colombia Acorn Fund in this profile outlines its successful approach to growth investing. “We’re growth-at-a-reasonable-price investors,” said …
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June 12th, 2006
Sell off leaves value in energy, Church
Greg Church, founder of Church Capital Management, told TheStreet.com in an audio interview that the speculative bubble in resources …
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June 11th, 2006
Growth not divorced from value
An interesting chapter from Awath Damodaran’s book Investment Philosophies challenges the myth that growth investors don’t care about …
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GARP Explained
GARP investors want growth, but don’t want to pay too much for it. While value investors often seek stocks trading on low price-to-earnings (PE) multiples, growth investors want stocks showing high earnings (EPS) growth. GARP investors have worked out a simple ratio to combine both of these factors — the price/earnings growth ratio (PEG). The PEG ratio is calculated by dividing the PE ratio by the forecast EPS growth rate. It gives GARP investors an indication of whether the PE ratio they’re buying the stock at is too high relative to growth. So if the PE ratio is 18 and the forecast EPS growth is 20 per cent, the PEG ratio is 0.9. GARP investors generally target stocks with PEGs less than one. Gurus of this style include former Fidelity fund manager Peter Lynch and UK investor and author Jim Slater.
