It is not the fastest growth that wins, but the steadiest at a fair price: GARP avoids deep-value risks and valuation bubbles alike.
Save the strategy and StockScorer checks its rules for you every day. You'll get a heads-up whenever a stock crosses the upper or lower score threshold.
Gap to MSCI World: +125.9 percentage points total, +3.6 per year
Index, start = 100
Past performance is not a reliable indicator of future results.
Based on all 16,182 stocks with a score. Not rated are stocks that the profile does not classify because of a size limit or an exclusion rule.
Bars by actual classification. The thresholds depend on the cap class: Large caps: high from 3, low below 1 points; Mid caps and Small caps: high from 4, low below 2 points. Above them, the number of high matches per score.
| Score | Number of stocks | High match | Medium match | Low match |
|---|---|---|---|---|
| -2 | 6,761 | 0 | 0 | 6,761 |
| -1 | 2,993 | 0 | 0 | 2,993 |
| 0 | 1,682 | 0 | 0 | 1,682 |
| +1 | 1,039 | 0 | 238 | 801 |
| +2 | 1,316 | 0 | 1,316 | 0 |
| +3 | 1,344 | 309 | 1,035 | 0 |
| +4 | 709 | 709 | 0 | 0 |
| +5 | 338 | 338 | 0 | 0 |
Every stock runs through the same disclosed rules. The points add up to a score, traceable down to the individual rule.
Each rule checks a metric against a threshold, here for example “Cheaper than its own history (P/E < 5Y average)”.
In this profile, each rule that is met counts +1 to +2 or −1 points.
The sum is the score. That gives three classes: high, medium, low match.
Thresholds vary by cap class.
These terms describe only the match with the criteria, not a recommendation to buy or sell.
10 to 25% per year over five years: the stability band earns the highest single score (+2).
The current P/E is measured against its own 5-year average, not against the market.
A return on equity above 15% ensures the growth is generated profitably.
PEG between 0 and 1.2, with no floor; above that growth gets too expensive.
These exact rules run over every stock daily.
After signing up for free, you can copy the full profile in the rule editor, adjust its thresholds, and save it as your own starting profile.
See and copy all rules for freeIndex, start = 100
The backtest shows a total return of +366.0%. The MSCI World reaches +240.1% over the same period.
The same strategy with the same settings, started at every possible date. Each dot is a separate run over 5 years.
The periods overlap heavily, neighbouring runs share almost all periods. The spread therefore looks smaller than it would for independent periods. Past results say nothing about future ones.
Strategy calculated without fees and taxes, dividends reinvested.
Point-in-time composition since June 30, 2009: each period uses the members at that time. Stocks that left the market early may be missing, which favours the result.
Historical period, quarterly rebalancing. Past performance is not a reliable indicator of future results.
Purely mechanical rule application, no curated-list effect: stocks with a high match can fall just like any other stock.
Dots per card, in this order: Profitability, Growth, Valuation. Filled means at least one rule in the category is met.
For long-term investors seeking the compromise: more dynamism than classic dividend stocks, less risk than hyper-growth. GARP stocks are rarely spectacular. That is exactly the idea.
GARP (growth at a reasonable price) is the middle path between the extremes: deep value leans into low prices and risks structurally sick companies; pure growth leans into dynamism and risks valuation bubbles. The balanced GARP model demands both in moderation: steady earnings growth of 10 to 25% per year (fast enough for real compounding, slow enough to be sustainable), a P/E below its own 5-year average and a PEG in the fair window. Extremely low PEGs are deliberately not rewarded: they often point to cyclical earnings peaks whose growth will not repeat.
Four building blocks form the score: earnings growth of 10 to 25% per year (5-year CAGR) earns +2. The stability band is deliberately the highest single score. A current P/E below its own 5-year average earns +1, a return on equity above 15% another +1, and a PEG between 0.5 and 1.2 one more point.
On the deduction side: declining or unstable earnings growth (negative 5-year trend, missing history or a recently fallen profit) costs one point, as does a PEG above 2 (or without a meaningful value). The upper threshold is 3 points for large caps and 4 for mid and small caps.
Historical valuation: current P/E below its own 5-year average (+1).
Earnings stability: 5-year CAGR between 10 and 25% (+2); negative trend, missing history or recently declining earnings (−1).
Profitability: return on equity above 15% (+1).
Valuation: PEG 0–1.2, no floor (+1); PEG above 2, negative or missing (−1).
The difference to the PEG strategy lies in the treatment of extremes: a PEG of 0.3 earns a dedicated extreme-undervaluation bonus there, while here it counts unremarkably within the whole 0-to-1.2 window. Since the fidelity round (23 August 2026) the PEG window no longer has a floor (previously 0.5 to 1.2): even very low PEGs score here, and the safety net against cyclical traps stays ga-03 (a deduction for recently declining profit), not a PEG minimum.
Absurdly low PEGs frequently occur in commodity and cyclical stocks at the end of a boom cycle, when the seemingly high growth is about to tip over. Documented deviation: the original criterion "EPS growth between 10 and 25% in every single year" cannot be mapped directly with annual data. StockScorer uses the 5-year CAGR band and adds a deduction when the most recent annual profit declined: together a good approximation of "steady rather than erratic".
For patient quality investors who want growth without paying for hope stocks, as a core strategy for the long-term portfolio.