Peter Lynch is widely regarded as one of the greatest investors of the modern era. As the manager of Fidelity Investment's Magellan Fund from 1977 to 1990, he averaged an astonishing 29.2% annualized return. To put his fund's performance into perspective, it would take less than 20 years to turn an initial investment of $10,000 into a million-dollar bankroll. 

One of Lynch's main tools was his adept use of the PEG ratio, a financial metric that gauges how expensive a stock is relative to its five-year projected growth rate. A PEG ratio of less than 1 is ideal, as it means that a stock is undervalued (assuming the company's growth forecast is indeed accurate). 

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Source Fool.com