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This is funny...it took the long way around the block...loooong way.
SPAR...TY, TY, Tyvm...
TTM...Tata's looking teets up. (back2chart)
CAT...Caterpillar...hit 'em when they're down.
...and boy are they down!
FSIN...Fushi Copperweld (10.00)
Bargain days comin,imo.
PRGN...Paragon Shipping (12.89)
9 month daily:
The Three Musketeers
An Introduction to GARP Investing
by Sarah F. Roach
http://jvbruni.com/commentary-musketeers.htm
...excellent article,imo
TXT...Textron (38.92)
Large cap...armored vehicle manufacturer.
SBH...Sally Beauty Holdings (8.64)
A little outside my GARP criteria but I'm letting Sally in because she's all that and a JerriCurl.
imo
TSL...Trina Solar (27.39)
I expect this to revisit the more reasonable $26 area soon.
So there's that.
imo
from Morningstar: Growth at a Reasonable Price
Managers who seek growth at a reasonable price (GARP) try to strike a balance between strong earnings and good value. Some managers in this group find moderately priced growth stocks by buying the rejects of momentum investors; often, these stocks have reported disappointing earnings or other bad news. GARP managers also look for companies that have been ignored or overlooked by market analysts and that are therefore still selling cheaply. Like value investors, GARP investors try to find companies that are only temporarily down and out and that have some sort of catalyst for growth in the works. Because many GARP managers are sensitive to high price tags, this group of growth funds often features lower-than-average price multiples than the flat-out growth funds we discussed in the preceding section. As a result, these funds can land in the blend column of the Morningstar Style Box. GARP funds also tend to have lower turnover rates than pure-growth funds and are therefore generally more tax-efficient than more aggressive growth offerings. Prominent GARP funds include T. Rowe Price Growth Stock PRGFX and Gabelli Growth GABGX.
Growth at a Reasonable Price
Managers who seek growth at a reasonable price (GARP) try to strike a balance between strong earnings and good value. Some managers in this group find moderately priced growth stocks by buying the rejects of momentum investors; often, these stocks have reported disappointing earnings or other bad news. GARP managers also look for companies that have been ignored or overlooked by market analysts and that are therefore still selling cheaply. Like value investors, GARP investors try to find companies that are only temporarily down and out and that have some sort of catalyst for growth in the works. Because many GARP managers are sensitive to high price tags, this group of growth funds often features lower-than-average price multiples than the flat-out growth funds we discussed in the preceding section. As a result, these funds can land in the blend column of the Morningstar Style Box. GARP funds also tend to have lower turnover rates than pure-growth funds and are therefore generally more tax-efficient than more aggressive growth offerings. Prominent GARP funds include T. Rowe Price Growth Stock PRGFX and Gabelli Growth GABGX.
http://news.morningstar.com/classroom2/printlesson.asp?docId=2989&CN=com
GARP- Growth at a reasonable price.
The P/E of the company in relation to the growth of the business as represented by the analyst's mean estimate of sustainable growth for the business looking out 3 to 5 years. A ratio of less than one is viewed as cheap while ratios well over 1 are viewed as expensive. If a company has a forecast growth of 15% over the next 3 to 5 years, but is selling at a P/E over 35, this might be viewed as a non-GARP. However, a growth rate of 30% with a P/E of 20 times, would, subject to further analysis, represent a possible GARP stock.
http://www.uoutperform.com/New_Folder/glossary_of_terms.htm
BuyandHold: GARP is becoming increasingly mentioned, and it's important to know what it is.
The Definition...
GARP stands for Growth At A Reasonable Price. It is actually a combination of two popular and successful strategies: value investing and growth investing. In other words, GARP investors look for a stock with plenty of growth potential but one that is also reasonably priced.
About GARP...
Value investors look for relatively cheap stocks -- cheap that is in comparison to their earnings and book value. Growth investors, on the other hand, look for stocks that will grow faster than others. (A favorite with growth investors that made a big splash was Qualcomm, which gained over 2,000% in 1999.)
I see GARP investors in the middle, between value and growth investors. They don't look for companies that are hugely undervalued (or in trouble), nor do they look for wild, highflying growth stocks.
One of the best-known GARP investors is Peter Lynch who gained national prominence when he was manager of the Fidelity Magellan Fund. He is also the co-author of three books that he wrote with John Rothchild. You might like to read at least one of them -- they're not difficult: "One Up on Wall Street", "Beating the Street", and "Learn To Earn".
GARP stocks are almost always in healthy, robust sectors of the economy. Right now those sectors appear to be home building, generic drugs, health care and some specialty retailers.
About PEG...
Many GARP investors use a ratio called PEG when picking stocks. PEG is short for P/E Ratio Divided By Growth.
To find a stock's PEG you divide the current P/E ratio by the company's projected growth rate over the next year. The result is the PEG ratio. For example, a company with a projected P/E of 10 and a projected earnings growth of 10% has a PEG ratio of one.
Note: Some experts like the earnings growth rate to be based on five years, but most go for one year.
There are a couple of places on the Internet that will help you. At www.stockscreener.com you can screen for a list of PEGs in a number of ways while at www.fool.com/pegulator/pegulator.htm you can determine an individual stock's PEG.
If the PEG is less than one, the stock is believed to be undervalued. If it's more than one, the stock is believed to be overvalued. Some GARP investors look for stocks with PEG ratios no higher than 0.5, which means the company's P/E ratio is 50% below its growth rate. Most, but not all GARP types like a PEG of one or below.
As you study PEGs, keep the advice of Standard & Poor's David Braverman in mind: "If Company X has a P/E of 20 and its earnings are growing at 30% per year, it has a PEG of 0.67. Company Y, on the other hand, has a P/E of 10 and earnings growth estimated at 18% per year and a PEG of 0.56. GARP investors would pick Company Y -- the stock with the lower PEG measure -- since it is more attractively valued relative to its earnings potential."
In other words, you want to avoid investing in companies that have both a high growth rate and a high P/E.
While GARP investing can be successful, don't let it restrict your thinking. You should also look for companies with a reasonable amount of debt, that are leaders in their industry, that are well managed and have a high return on equity (ROE). You can read specifically about such companies in BUYandHOLD's Advisory Services research. Click here for information on how to sign up.
THE TRIVIA CORNER
GARP is not restricted just to Wall Street.
John Irving's fourth book, The World According to Garp (1978) deals with the life and times of a writer T.S. Garp, his English professor wife Helen and their two sons, Duncan and Walt. A novel about a writer writing novels, it is both intensely funny and tragic, and certainly unforgettable as was Robin Williams' portrayal of Garp in the movie version.
http://www.buyandhold.com/bh/en/education/oak/qa/qa81.html
Investorguide: Understanding GARP Stock Investing Strategy
As advocated in the value investing strategy, some people enjoy the idea of getting a stock for a bargain price. Others like investing in companies with large growth potential and pursue growth stocks for their portfolio. But for those people who like the ideas presented in both strategies but, find some of the stock picking criteria too severe, then the GARP stock investing strategy might be appropriate.
GARP (Growth at Reasonable Price) is literally a hybrid stock investment strategy that emphasizes picking investments slightly under valued but still expected to have solid earnings growth in the coming years. Many strict value and growth investors are irritated by the perceived ambiguity of the GARP stock strategy. However, GARP investors do seek out specific valuation metrics in order to help them make individual stock selections. But, a degree of personal judgment is also required. Peter Lynch is one of the most famous GARP investors who had an amazing average return of 29% during the years 1977-1990. So how do Peter and other GARP investors pick their stocks?
Growth and GARP investors definitely share a love of studying companies that are expected to continue to grow in the coming years. Growth projections beyond those of other companies within the same industry are welcome by GARP investors - but only to a point. Unlike growth investors who tend to pursue the stocks of companies expected to expand revenue, earnings, or both in the 25-50% range, GARP advocates are a little paranoid of such large numbers. Excessive growth projections make GARP investors nervous since they cause higher stock prices and, increase risks of loss should expectations fail to be met. Growth projections in the realistic and affordable 10-20% range make GARP investors more comfortable and willing to make an investment.
Because of their concern for growth, GARP investors also like the P/E ratio valuation metric because, it tells how the earnings compare to the share price. The P/E ratio can be found by taking the current share price and dividing it by the earnings per share (EPS) price, or:
P/E Ratio = Current Share Price / Earning Per Share
For a company to have a P/E ratio, it must at least be operating profitably and therefore have earnings to report. A high P/E ratio, say 40, indicates that the company is currently trading at 40 times its earnings. Growth investors love buying stocks with higher P/E ratios because there are high expectations the company will see significant growth. However, those high expectations come with higher prices for the stocks and GARP investors like to find investments that have been slightly under valued by the market. Higher P/E numbers tend to indicate businesses that are actually over valued, which is why they are not sought out by GARP investors. A P/E ratio in the 10-20 range is more reasonable for a GARP investor as it is less expensive and, less risky than a stock with a P/E ratio of 25 or above. Pursuing stocks with lower P/E ratios is also a tactic of value investors.
GARP and growth investors also tend to prefer businesses with a lower price to book (P/B) ratio. The P/B ratio is used to gauge how much value the market actually places on the book value of the business in question. It is found by dividing the current share price by the book value per share. Or:
P/B Ratio = Current Share Price / Book Value per Share
Where
Book Value per Share = Book Value (Assets - Liabilities) / Outstanding Shares
GARP investors look for a lower P/B ratio as that tends to indicate greater value. Companies with a P/B ratio that is below the average for the industry are especially prized by GARP investors since it indicates a larger potential for profit when the market corrects itself and values the stock properly.
While the P/B ratio is used to gauge the relative value of a business and help determine if its stock is under or over valued, the PEG ratio is another favorite valuation metric used by GARP investors to assess growth potential in relation to the value of the company. It is calculated by dividing the P/E ratio by the projected growth in earnings of the company:
PEG Ratio = P/E ratio / Projected Growth in Earnings
For the GARP investor, a PEG ratio of 1 or less is a good indicator that the company warrants further analysis. For example, a company with a P/E ratio of 15 and a projected growth in earnings of 25%, or 15/25 equals a PEG ratio of 0.6 and, would be considered a good investment by most GARP investors. While a 1 or less is desired, companies with a PEG ratio of around 0.5 are considered better as they have good growth potential but, are also slightly under valued - Growth at a Reasonable Price!
Indeed, GARP investors seek a balance between value and growth that can seem a little confusing to those unfamiliar with this stock investment strategy. They are not interested in outstanding future growth rates or exceptional bargains sought by growth or value investors. A sound balance between growth potential that is realistic and attainable while also looking for slightly undervalued stocks can be a great recipe for sustained profit with minimal risk.
A careful and studied analysis of the financial statements, projected growth in earnings, and valuation metrics like the P/B and P/E ratios are necessary for GARP investors to pick the right stocks for their portfolio. While every GARP investor ultimately customizes a formula that works best for him/her, there is an ordered process that helps investors choose stocks meeting the GARP criteria for Growth at a Reasonable Pace.
http://www.investorguide.com/igu-article-976-stock-strategies-understanding-garp-stock-investing-strategy.html
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The Board According to GARP
Board Rules: NYSE, AMEX or NASDAQ listed stocks only here. No OTC or pink sheet securities will be entertained. When posting a potential GARPer, please include the reasonable price at the time of the post and a chart if possible. Any further DD is also welcomed. GARP parameters can be loosely defined and scans can be inclusive or exclusive of different factors to further tweak the GARP strategy.(ie. market cap, float, volume,sector, etc)
Investopedia:
Growth At A Reasonable Price - GARP
An equity investment strategy that seeks to combine tenets of both growth investing and value investing to find individual stocks. GARP investors look for companies that are showing consistent earnings growth above broad market levels (a tenet of growth investing ) while excluding companies that have very high valuations (value investing). The overarching goal is to avoid the extremes of either growth or value investing; this typically leads GARP investors to growth-oriented stocks with relatively low price/earnings (P/E) multiples in normal market conditions.
GARP investing was popularized by legendary Fidelity manager Peter Lynch. While the style may not have rigid boundaries for including or excluding stocks, a fundamental metric that serves as a solid benchmark is the price/earnings growth (PEG) ratio. The PEG shows the ratio between a company's P/E ratio (valuation) and its expected earnings growth rate over the next several years. A GARP investor would seek out stocks that have a PEG of 1 or less, which shows that P/E ratios are in line with expected earnings growth. This helps to uncover stocks that are trading at reasonable prices.
In a bear market or other downturn in stocks, one could expect the returns of GARP investors to be higher than those of pure growth investors, but sub par to strict value investors who generally purchase shares at P/Es under broad market multiples.
http://www.investopedia.com/terms/g/garp.asp
Do your own due dilligence. I am not making buy or sell recomendations nor am I making timing calls. Never buy or sell securities based on non-professional advice from the polka community.
http://www.optionseducation.org/
http://finviz.com/screener.ashx?v=111&f=cap_midunder,fa_pb_u3,fa_pe_u20,fa_peg_low,geo_usa&ft=4&o=-marketcap
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