Markets & Finance

The GARP Guide to Good Buys


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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