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Zacks.com featured highlights include: Gray Television, Syneos, Dollar General, Sabre and Jones Lang

Zacks.com featured highlights include: Gray Television, Syneos, Dollar General, Sabre and Jones Lang

For Immediate Release

Chicago, IL – November 14, 2018 - Stocks in this week’s article are Gray Television GTN, Syneos Health SYNH, Dollar General DG, Sabre SABR and Jones Lang LaSalle JLL.

5 Cheap GARP Picks with Discounted PEG

The investment pattern of the current generation is gradually tending toward hybrid investment from pure play theories like growth or value. According to them, to make a long-term investment more effective, the principles of both value and growth strategies need to be combined.

Accordingly, GARP (growth at a reasonable price) investment, often known as a special case of value investment, is gaining popularity. What GARPers look for is whether the stocks are somewhat undervalued and have solid sustainable growth potential (Investopedia).

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And here lies the importance of a not-so-popular fundamental metric, the price/earnings growth (PEG) ratio. Although it is categorized under value investing, this strategy follows the principles of both growth and value investing.

The PEG ratio is defined as: (Price/ Earnings)/Earnings Growth Rate

It relates the stocks P/E ratio with future earnings growth rate.

While P/E alone only gives an idea of stocks that are trading at a discount, PEG while adding the growth element to it, helps stocks that have solid future potential.

A lower PEG ratio, preferably less than 1, is always better for GARP investors.

Say for example, if a stock's P/E ratio is 10 and expected long-term growth rate is 15%, the company's PEG will come down to 0.66, a ratio that indicates both undervaluation and future growth potential.

Unfortunately, this ratio is often neglected due to investors' limitation to calculate the future earnings growth rate of a stock.

There are some drawbacks to using the PEG ratio though. It doesn't consider the very common situation of changing growth rates such as the forecast of the first three years at very high growth rate followed by a sustainable but lower growth rate in the long term.

Hence, PEG-based investing can turn out to be even more rewarding if some other relevant parameters are also taken into consideration.

For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/337254/5-cheap-garp-picks-with-discounted-peg

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 options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.

About Screen of the Week

Zacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine.  But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use.

Strong Stocks that Should Be in the News

Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has more than doubled the market from 1988 through 2016. Its average gain has been a stellar +25% per year. See these high-potential stocks free >>.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Sabre Corporation (SABR) : Free Stock Analysis Report
 
Gray Television, Inc. (GTN) : Free Stock Analysis Report
 
Jones Lang LaSalle Incorporated (JLL) : Free Stock Analysis Report
 
Dollar General Corporation (DG) : Free Stock Analysis Report
 
INC Research Holdings, Inc. (SYNH) : Free Stock Analysis Report
 
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