If you are looking for a profitable portfolio of stocks offering the best of value and growth investing, you can try the growth at a reasonable price or GARP strategy.
The strategy helps investors gain exposure to undervalued stocks with impressive prospects. Unlike a blend strategy, a portfolio that uses GARP investing is expected to include stocks that offer the best of value and growth investing. Griffon GFF, Ralph Lauren RL, ABB ABBNY and Autodesk ADSK are some GARP stocks that hold promise.
GARP Metrics: Mix of Growth & Value Metrics
The GARP strategy seeks to offer an ideal investment by utilizing the best features of value and growth investing. Investors adopting the GARP approach prefer buying stocks priced below the market or any reasonable target determined by fundamental analysis. These stocks also have solid prospects in terms of cash flow, revenues, earnings per share (EPS) and so on.
Growth Metrics
A strong earnings growth history and impressive earnings prospects are the main concepts that GARP investors borrow from the growth investing strategy. However, instead of super-normal growth rates, pursuing stocks with a more stable and reasonable growth rate is a tactic of GARP investors. Hence, growth rates between 10% and 20% are considered ideal under the GARP strategy.
Another metric that growth and GARP investors consider is return on equity (ROE). GARP investors look for a strong and higher ROE than the industry average to identify superior stocks. Stocks with positive cash flows find precedence under the GARP plan.
Value Metrics
GARP investing prioritizes popular value metrics, the price-to-earnings (P/E) and price-to-book (P/B) ratios. Though this investing style picks stocks with higher P/E ratios than value investors, it avoids companies with extremely high P/E ratios.
Using the GARP principle, we ran a screen to identify stocks that should offer solid returns in the near term.
Screening Parameters
Along with the criteria discussed in the above section, we have considered a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
Last 5-year EPS & projected 3-5-year EPS growth rates between 10% and 25% (Strong EPS growth history and prospects ensure improving business.)
ROE (over the past 12 months) greater than the industry average (Higher ROE than the industry average indicates superior stocks.)
P/E and P/B ratios less than the M-industry average (P/E and P/B ratios less than that of the industry indicate that the stocks are undervalued.)
Here are four stocks from the eight that made it through the screening process. Each of the selected stocks given below carry a Zacks Rank #2.
Griffon Corporation is gaining strategic clarity as its pivot to a pure-play North American building products company accelerates. The AMES–ONCAP joint venture—covering the U.S. and Canada operations—is on track to close by the end of June 2026, sharpening focus on its higher-margin core. In second-quarter fiscal 2026, a 5% price-and-mix tailwind largely neutralized a 6% residential volume decline, keeping adjusted EPS from continuing operations flat at $1.05. Free cash flow from continuing operations reached $100.7 million in the first half, enabling $72 million in shareholder returns. Management maintained its fiscal 2026 guidance of $1.8 billion revenues and $458 million adjusted EBITDA. Clopay's May 2026 proprietary switchable-glass door launch expands its premium commercial portfolio, while $247 million in buyback capacity supports capital returns.
The Zacks Consensus Estimate for Griffon’s fiscal 2026 earnings has moved north by 2.6% to $5.17 per share in the past 60 days. Its earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters, while missing once, the average surprise being 3.25%.
Ralph Lauren presents a compelling near-term opportunity anchored by strong fiscal 2026 fundamentals and forward momentum. Annual revenues crossed $8 billion for the first time, growing 12% in constant currency, while direct-to-consumer comparable store sales climbed 13% for the year. Full-year adjusted operating margin expanded 140 basis points to 15.4% in constant currency, surpassing internal targets. Average unit retail rose mid-teens, driven by brand elevation and disciplined full-price selling. High-potential categories — women's apparel, outerwear, and handbags — surged over 20% in the fourth quarter. Asia revenues soared 31% in the fiscal fourth quarter. The board approved a 10% dividend increase. For fiscal 2027, management has guided mid-single-digit revenue growth and continued operating margin expansion, consistent with its long-term Next Great Chapter: Drive commitments.
The Zacks Consensus Estimate for RL’s fiscal 2027 earnings has moved north by 1.3% to $18.29 per share in the past 60 days. The company surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 9.14%.
ABB Ltd. presents a compelling near-term investment opportunity underpinned by strong fundamentals. In first-quarter 2026, the company posted record orders of $11.3 billion, up 24% on a comparable basis, with Electrification orders surging 44% and a robust book-to-bill of 1.29. Operational EBITA margins expanded 320 basis points to 23.5%, while free cash flow hit a first-quarter record of $1.25 billion, up 92% year on year. Management has since raised its full-year 2026 guidance, targeting high single-digit to low double-digit comparable revenue growth with continued year-on-year margin improvement. In May 2026, ABB announced a $200 million European investment in medium-voltage manufacturing, reinforcing its grid transformation strategy across data center and utility segments. A $2 billion share buyback program adds further shareholder support.
The consensus estimate for ABB’s 2026 earnings has moved north by 12.9% to $3.6 per share in the past 60 days. Its earnings surpassed the Zacks Consensus Estimate in two of the trailing four quarters, while missing twice, the average surprise being 10.72%.
Autodesk enters the near-term with solid fundamental momentum. First-quarter fiscal 2027 revenues grew 18% year over year to $1.93 billion, while free cash flow surged 58% to $876 million. The company's largest segment, AECO, expanded 20% and the Make segment grew 25%. Following this strength, Autodesk raised its full-year FY27 guidance, now targeting revenues of $8.16–$8.22 billion, non-GAAP EPS of $12.40–$12.65, non-GAAP operating margin of approximately 39%, and free cash flow of $2.73–$2.80 billion. The announced $3.6 billion acquisition of MaintainX, alongside the launch of Autodesk Operations Solutions (AOS), meaningfully extends its Design-Make-Operate lifecycle strategy. The May 2026 Autodesk for Small Business initiative broadens addressable markets. Expanding AI-driven Fusion workflows and a current RPO of $7.8 billion, up 9%, reinforce near-term revenue visibility.
The consensus estimate for ADSK’s fiscal 2027 earnings has moved north by 0.2% to $12.4 per share in the past 60 days. The company surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 7.07%.
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Ralph Lauren Corporation (RL): Free Stock Analysis Report
Autodesk, Inc. (ADSK): Free Stock Analysis Report
Griffon Corporation (GFF): Free Stock Analysis Report
ABB Ltd (ABBNY): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).