GARP - Shankarnath

https://www.youtube.com/watch?v=dnPqlybspi0 GARP (Growth at a Reasonable Price) investing, a strategy popularized by investor Peter Lynch, lies between value and growth investing, aiming to combine the best of both worlds. It focuses on identifying companies where growth is being undervalued rather than simply finding cheap stocks. In this video, I explored various iterations of GARP investing strategies, each with its own set of criteria: 1. The first iteration involved a simple screener that considered market capitalization, the PEG ratio and EPS growth rate 2. I then utilized SOIC's GARP framework which is a combination of market cap, year-on-year quarterly sales and profit growth rates, plus a PE multiple of below 30. I was surprised, this methodology excluded the PEG ratio, a key component in traditional GARP strategies 3. The third GARP methodology, inspired by an Economic Times article, involved a 6-point criteria including market cap, sales revenue, profit growth rates, PEG ratio, and analyst coverage 4. The fourth GARP strategy the S&P 500 GARP Index, which tracks companies considering growth factors like EPS and sales-per-share growth rates, as well as quality and value composite factors such as financial leverage, return on equity, and earnings-to-price ratio Finally I put all our learning together to create a single GARP strategy that delivered a remarkable 115% return over the last year. Overall, GARP investing involves balancing growth potential with valuation metrics to identify undervalued growth opportunities

by Riz