Daily Traders Edge

3 Growth Stocks You Can Buy at a Reasonable Price

September 14
09:07 2021

Even with last week’s fall in prices, growth stocks have been the better-performing stocks over the past month. We saw strong year-over-year growth from many companies that reported second results. While this type of growth is unlikely to maintain at its current pace, many companies are still expected to see strong growth over the next few quarters.

However, investors need to be mindful of heightened valuations which is why they should consider a GARP strategy. GARP stands for growth at a reasonable price. This strategy entails investing in stocks that have the potential for growth and trading at discount prices. These stocks can offer quick profits over the near term.

To find GARP stocks with near-term potential, I ran a screen using our POWR Ratings system to find stocks with an overall rating of Buy or Strong Buy, a Growth Grade of A or B, a Value Grade of A or B, and a five year expected EPS growth rate of 20% or higher. I narrowed down that list to three stocks I feel have the best prospects, which include Westlake Chemical Corporation (WLK – Get Rating), ManpowerGroup (MAN – Get Rating), AutoNation, Inc. (AN – Get Rating).

Westlake Chemical Corporation (WLK – Get Rating)

WLK is a vertically integrated manufacturer and marketer of basic chemicals, vinyls, polymers, and building products. Its products are used for flexible and rigid packaging, automotive products, coatings, water treatment, refrigerants, residential and commercial construction. The company operates in the business segments of Olefins and Vinyls.

The company is seeing strong demand for its products. For instance, it is witnessing solid momentum for polyethylene. Management expects this demand to continue due to its focus on specialty applications, including food packaging and healthcare. WLK has also seen strong demand for PVC resin and downstream building products, with the economy opening up from COVID restrictions.

The firm’s downstream vinyl products business and the domestic demand for PVC are gaining strength in residential construction activities due to rising housing starts. In addition, with people continuing to spend on repair and remodeling activities, the company should see strong demand for some time. Plus, tight supply conditions should support elevated prices and margins in the short term.

WLK has an overall grade of B, which translates into a Buy rating in our POWR Ratings system. The company has a Growth Grade of B as EPS is up 139.4% over the past year, while EBITDA is up 66.8% over the same period. Analysts expect earnings to rise 485.9% year over in the current quarter and an average of 49.7% a year for the next five years.

Continue Reading at StockNews.com

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