What is the GARP approach to investing?
GARP stands for growth at reasonable price. This approach is well-suited to current market conditions when a large number of stocks are trading at more than their five-year average P/Es (price-to-earnings ratio). If you adhere to a strict value approach, you would not be able to invest in any of these stocks. So, many investors rely on the PEG (P/E to growth) ratio.
How are stocks chosen here?
To calculate the PEG ratio, a stock’s P/E ratio is divided by its EPS (earnings per share) growth rate. If the PEG ratio is less