3 Stocks Peter Lynch Would Love
Would you like 29.2% average annual investment returns for 13 straight years? That's the incredible record Peter Lynch achieved while running Fidelity's Magellan Fund from 1977 to 1990, when he retired.
Since then, Lynch has shared his common sense investing strategy in several books, beginning with One Up On Wall Street. He popularized the growth at a reasonable price (GARP) investing approach.
GARP investing doesn't necessarily have rigid boundaries for stock inclusion or exclusion, but the price-to-earnings growth (PEG) ratio serves as a solid benchmark when applying fundamental metrics. The PEG tells us the ratio between a company's P/E ratio (valuation) and the expected earnings growth rate over the next several years. Stocks with a PEG of 1 or less show investors that P/E ratios are in line with expected earnings growth. This metric helps GARP investors identify stocks trading at reasonable prices.
Source Fool.com
