Markets & Finance

The GARP Guide to Good Buys

Posted on January 15, 2004

By Michael Kaye, CFA Companies with the potential for solid earnings growth can be attractive investment candidates. But amid a richly valued stock market, investors may balk at paying above-market price-earnings multiples for those names. That's where this week's screen comes in. S&P's investing methodology features as one of its cornerstones GARP -- growth at a reasonable price.

Taking that as our guide, we looked for companies with promising prospects: growth rate estimates in the top 10% of S&P 500 companies, according to research firm I/B/E/S. Then we took care of the "reasonable price" part by screening for issues with a p-e ratio below that of the S&P 500.

These six names emerged:

GARP, according to S&P

Company/ticker

S&P

STARS Rank

Freeport McMoRan Copper & Gold (FCX

)

2

Big Lots (BLI

)

3

Kohl's (KSS

)

3

Ingersoll-Rand (IR

)

3

Express Scripts (ESRX

)

3

EOG Resources (EOG

)

4

Kaye is a portfolio services analyst for Standard & Poor's

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