GARP is an acronym used in the investment industry to connote \u201cgrowth at reasonable prices.\u201d\u00a0 Last week, we discussed the market size and style trends year-to-date and what our models expect to see for the year ahead.\u00a0 The bottom line is that both our predictive and valuation models thought the mega-cap-weighted ETFs, such as QQQ, IVV, XLK and IWF had gotten ahead of themselves in year-to-date gains and were now candidates to investigate for potentially trimming back positions.\u00a0 Conversely, we found the iShares Russell Small Cap ETF (IWF) to be the most attractive ETF that combines size and style.\u00a0 Beyond that, for potential price appreciation at a good value, we also liked the standard in small Cap, iShares Russell 2000 ETF (IWM) along with IWD, the iShares Russell 1000 Large Cap Value ETF.<\/p>\n
At that time, we also included four stocks that our models considered ripest for price appreciation along with being in at least our top half for valuation. We got some feedback that two stocks, Aspen Aerogels (ASPN) <\/b>and Enviva Corp (EVA) <\/b>were scary because they had both dropped more than 30% in the past quarter and 70% in the past year.\u00a0 As such, they were the epitomes of falling knives.\u00a0 It was also suggested that it would be more helpful to focus on stocks our models find relatively attractive that provided expected earnings growth at reasonable prices, paid a dividend, and had non-negative momentum.\u00a0 Thus, the title of this week\u2019s article is GARP <\/b>with yield \u201cexcluding falling knives\u201d.<\/p>\n
The selection criteria we used were (screens like this can be performed on the ValuEngine.com website):<\/p>\n
There are five stocks that passed those screens in our model and databases.\u00a0 They are:<\/p>\n
Capital City Bank Group, Inc. (CCBG) <\/b>is a financial holding company with banking subsidiaries and numerous indirect subsidiaries. The Banks are full-service banks, engaged in the commercial and retail banking business.<\/p>\n
Energizer Holdings Inc. (ENR)<\/b> is one of the world’s leading manufacturers and distributors of batteries and lighting products. The company is a major designer and marketer of automotive, fragrance, appearance, and air conditioning recharge products.<\/p>\n
Laureate Education, Inc. (LAUR<\/b>) is a degree-granting higher education institution. The company offers high-quality undergraduate, graduate, and specialized programs. Laureate Education, Inc. is headquartered in Baltimore, Maryland.<\/p>\n
Oxford Industries, Inc. (OXM<\/b>) is an apparel company which designs, sources, markets and distributes products bearing the trademarks of its owned and licensed brands. Oxford’s owned brands include Tommy Bahama, Lilly Pulitzer, Oxford Golf, and Billy London.<\/p>\n
Strategic Education, Inc. or SEI, (STRA<\/b>) through its subsidiaries Strayer University and New York Code and Design Academy (NYCDA), provides a range of post-secondary education and other academic programs in the United States.<\/p>\n
This table presents a look at the data behind these stocks.\u00a0 The iShares S&P 500 Index ETF (IVV<\/b>) is used for comparison and benchmarking purposes.<\/p>\nCurrent ValuEngine reports on these stocks or ETFS can be viewed<\/b> HERE<\/b><\/a><\/h5>\n