I can see the angry Value investors with their pitchforks now.
But Value investors are more disciplined we require an asset to be undervalued.
The question is the high growth that growth investors love what if you could have both?
Strong growth and a reasonable price would this not be the approach that would make the
most sense to increase your chances of making money? A cheap stock can be a value trap
and an Expensive stock could be nothing more than speculation but growth at a reasonable
price will cause you to look at neither.
Is a company grows faster than what you are paying for it does that not make the company
Same as a company with no growth and a very low multiple could still be expensive.
I recently looked for some stocks that feel offer growth at a reasonable price below I will
share some with you.
Green Mountain Coffee Roasters
If you look at strict valuations the company looks expensive at around 27 times forward earnings
however their growth rates have been in excess of 40% giving you a PEG below 1 which is in my
opinion the number that makes an investment attractive. Specialty Coffee is still coffee a semi
addictive product that people will probably never stop consuming.
EBIX is a company totally under the radar it seems last several quarters cash flows have steadily
grown and growth is at around 50% Yet this company that handles insurance transactions and builds
insurance exchanges trades at only ten times forward earnings. Looks like a another winner of the
cheap stock lottery to me.
Deckers is a apparel and footwear company with a solid footprint and a couple strong young brands.
Their Revenue growth has been in excess of 40% yeat they only trade at a multiple of 16 which in my
opinion look worth further research.
Disclosure Author has Positions in GMCR and EBIX no position in DECK.
Growth rates for some companies wether discounted to show that even at slower growth the multiple was justified.
Disclosure: Author has positions in GMCR,EBIX No positions in DECK