What Makes a Stock a Peter Lynch GARP Stocks constituent?
Growth At a Reasonable Price (GARP) is an investment strategy popularized by Peter Lynch. It targets growth stocks with reasonable valuations, filtering for PEG ratios under 1.5 and ROE above 12%.
Establish the Valuation Cap
Ensure the PEG ratio is 1.5 or lower, protecting your capital from growth valuation compression.
Verify Growth Floor
Require trailing 12-month EPS growth above 15% to confirm active business expansion.
Check Capital Return
Confirm Return on Equity is 12% or higher to verify management capital efficiency.