For immediate release
Chicago, IL – April 21, 2022 – The stocks in this week’s article are East West Bancorp EWBC, SEI Investments Co. SEIC, Automatic Data Processing ADP and CDW Corp. CDW.
Add These 4 GARP Stocks to Your Portfolio for Maximum Return
If you are looking for a profitable stock portfolio that will offer the best in value and growth investing, try the growth at a reasonable price or the GARP strategy.
It helps an investor gain exposure to stocks that are undervalued and have impressive growth prospects. Unlike a mixed strategy, a portfolio that uses GARP investing should include stocks that offer the best value and growth investments.
GARP Metrics – Mixture of Growth and Value Metrics
The GARP strategy seeks to provide an ideal investment by utilizing the best characteristics of value and growth investments. Investors who take the GARP approach prefer to buy stocks that are priced below the market or any reasonable target determined by fundamental analysis. These stocks also have strong prospects for cash flow, revenue, earnings per share (EPS), and more.
A strong track record of earnings growth and impressive earnings prospects are the main concepts that GARP investors borrow from the growth investing strategy. However, instead of normal growth rates, looking for stocks with a more stable and reasonable growth rate is also a tactic of GARP investors. Therefore, growth rates between 10% and 20% are considered ideal under the GARP strategy.
Another measure of growth considered by both growth investors and GARP investors is return on equity (ROE). GARP investors look for a strong, higher ROE relative to the industry average to identify superior stocks. In addition, stocks with positive cash flows find priority under the GARP plan.
GARP investing prioritizes one of the popular measures of value – the price-to-earnings (P/E) ratio. Although this style of investing selects stocks with higher P/E ratios relative to value investors, it avoids companies with extremely high P/E ratios. In addition, the price-to-book (P/B) ratio is also taken into account.
Using the GARP principle, we ran a screen to identify stocks that should offer strong returns in the near term.
Here are four actions that crossed the screen:
Bancorp East-West serves as a financial bridge between the United States and Greater China by providing various personal and commercial banking services to small and medium-sized businesses, business executives, professionals and other individuals. The company currently sports a #1 Zacks rank. You can see the full list of today’s Zacks #1 Rank stocks here.
East West Bancorp has a four-quarter earnings surprise of 8.39% on average. The Zacks consensus estimate for EWBC’s 2022 earnings has moved north 4.9% to $6.81 per share in the past 30 days.
SEI Investments Co. is an asset management company offering commercial wealth management solutions comprising investment processing, management and operations solutions. The company carries a Zacks Rank #2.
SEI Investments has a four-quarter earnings surprise of 1.54%, on average. The Zacks consensus estimate for 2022 earnings has moved north 9.6% to $4.23 per share in the past 30 days.
Automatic data processing is a provider of cloud-based human capital management technology solutions, including payroll, talent management, human resources and benefits administration, and time and attendance management. The company carries a Zacks Rank #2.
Automatic data processing has an earnings surprise for the last four quarters of 5.5% on average. Zacks’ consensus estimate for ADP’s fiscal 2022 earnings has been flat at $6.82 per share over the past 30 days.
CDW Corp. is a leading provider of integrated information technology (IT) solutions for small, medium and large businesses, governments, educational institutions and healthcare. The company currently carries a No. 2 Zacks rank.
CDW has a four-quarter earnings surprise of 9.8% on average. Zacks’ consensus estimate for 2022 earnings has been flat at $9.30 per share over the past 30 days.
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Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in the options mentioned herein. An affiliated investment advisory firm may hold or have shorted securities and/or hold long and/or short positions in options mentioned herein.
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Contact: Jim Giaquinto
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5 shares ready to double
Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2021. Previous recommendations climbed +143.0%, +175.9%, +498 .3% and +673.0%.
Most of the stocks in this report fly under the radar on Wall Street, which provides a great opportunity to get in on the ground floor.
Today, check out these 5 potential home runs >>
Click to get this free report
Automatic Data Processing, Inc. (ADP): Free Inventory Analysis Report
SEI Investments Company (SEIC): Free Stock Analysis Report
East West Bancorp, Inc. (EWBC): Free Stock Analysis Report
CDW Corporation (CDW): Free Stock Analysis Report
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