GARP (Growth at a Reasonable Price)

The GARP strategy, which stands for "Growth at a Reasonable Price", is an investment approach that combines elements of both growth and value investing. Here's a breakdown of the core idea: Growth Focus: GARP targets companies with above-average earnings and revenue growth potential. These are businesses that are likely to experience significant expansion in the coming years. Value Consideration: However, GARP doesn't involve simply buying any high-flying stock. It emphasizes finding companies trading at a reasonable valuation relative to their growth prospects. By combining these aspects, GARP aims to identify stocks that offer the potential for substantial returns while also avoiding stocks that are already priced for perfection. Here are some additional points to consider about GARP: Metrics Used: Investors implementing GARP often use financial ratios like the price-to-earnings (P/E) ratio and the price-to-earnings-to-growth (PEG) ratio to assess a company's valuation relative to its growth rate.

by Nilesh