The stock market has seen a strong start in 2024, with the S & P 500, Dow Jones Industrial Average, and Nasdaq Composite all experiencing significant gains in the first quarter. However, the second quarter has brought some uncertainty, with all three major averages down more than 1%. This shift has led investors to seek out companies that offer growth potential at a reasonable price.
One popular investment methodology that investors are turning to is “growth at a reasonable price,” or GARP. This approach focuses on finding stocks that have strong growth prospects while still being attractively valued. CNBC Pro screened for stocks that fit this criteria and found opportunities across a diverse array of sectors within the S & P 500.
Among the companies identified as GARP opportunities are Royal Caribbean and Las Vegas Sands in the consumer discretionary sector. Both companies are expected to see significant earnings growth this fiscal year, with Royal Caribbean trading at a price-to-forward-earnings ratio of 13.2 and Las Vegas Sands at a forward P/E of 18.4.
Another company that stood out is Yum Brands, the parent company of Taco Bell, which is projected to experience a 12% growth in earnings per share in 2024. Despite lagging behind the S & P 500 in terms of stock performance, Yum Brands presents an appealing opportunity for growth-focused investors.
In the healthcare sector, Cigna Group and Cardinal Health are also highlighted as GARP opportunities. Cigna is trading at a 12.2 forward P/E ratio, with earnings estimated to increase by 13.3%, while Cardinal Health’s earnings could surge by 26%. Both companies offer growth potential at a reasonable price, making them attractive options for investors looking for opportunities in the stock market.
As the stock market continues to fluctuate, investors are seeking out companies that offer growth potential at a reasonable price. By utilizing the GARP methodology and identifying opportunities across various sectors, investors can make informed decisions about where to allocate their capital for maximum growth potential. With careful analysis and consideration, investors can navigate the uncertain market landscape and find opportunities for growth in 2024 and beyond.