GARP Strategy Beats the Odds: How PEG-Based Stock Picking Handles 2026's Market Chaos

As we navigate through 2026, U.S. stock markets hit fresh records—the Dow Jones broke past 49,000 while the S&P 500 scaled new heights. Yet beneath the surface, something feels off. Earnings expectations remain solid, AI momentum keeps flowing, but valuations sit uncomfortably elevated while the Federal Reserve’s next moves remain a puzzle. Inflation refuses to behave, making every economic data release feel like a potential market trigger. This “priced-for-perfection” scenario leaves investors stuck between two bad options: pure value plays lag behind growth narratives, while high-beta growth stocks swing wildly on any macro surprise. The real challenge is calculating uncertainty—knowing which stocks can weather the storm while still capturing upside.

Why GARP Splits the Difference

Here’s where GARP (Growth at a Reasonable Price) changes the game. Unlike pure value or pure growth investing, GARP hunts for companies that are somewhat undervalued and have real, sustainable growth ahead. The secret weapon? The PEG ratio—basically your P/E divided by expected earnings growth rate.

Think of it this way: if a stock trades at a P/E of 10 but is expected to grow at 15% annually, the PEG drops to 0.66, signaling both a bargain price and genuine future potential. A PEG under 1.0 is the sweet spot. The challenge most investors face is accurately calculating the growth assumptions, but screen-based approaches help by filtering systematically.

The Screening Blueprint

GARP investors follow a structured playbook. They hunt for stocks where:

• PEG Ratio sits below the industry median
• P/E (forward estimates) trades below peers
• Zacks Rank hits #1 or #2—historically proven winners
• Market cap exceeds $1 billion for solid trading liquidity
• 20-day volume surpasses 50,000 shares
• Earnings revisions trend positive (4-week upward revisions over 5%)
• Value Score rates A or B

This framework helps traders navigate 2026’s uncertain backdrop with data rather than guesswork.

Four GARP Winners Screened and Selected

Phibro Animal Health (PAHC): The New Jersey-based animal health and mineral nutrition leader scores a Zacks #2 Rank with A-rated Value and Growth scores. Beyond the discounted valuation metrics, Phibro boasts a 12.8% long-term growth expectation—solid for a company in its space. The company serves food animals across poultry, swine, beef and dairy, plus aquaculture, while supplying specialty ingredients to personal care and industrial sectors.

Commercial Metals Company (CMC): Irving-based CMC manufactures, recycles and distributes steel and metal products through a network spanning electric arc furnace mills, rerolling facilities and recycling centers across the U.S. and Poland. With Zacks Rank #1, Value Score B and Growth Score B, CMC stands out. The kicker: a 25.6% long-term expected growth rate—the most aggressive growth profile in this quartet.

Fox Corporation (FOX): The media and entertainment giant operates cable networks, broadcast television, digital platforms and Tubi streaming. Ranking #2 from Zacks with A-rated Value and B-rated Growth, FOX combines discounted valuations with a solid 12.3% historical growth trajectory. In a media landscape in flux, FOX shows resilience through diversified content distribution.

Adtalem Global Education (ATGE): This healthcare education provider serves the U.S. and Caribbean through Chamberlain, Walden, and Medical and Veterinary divisions, offering nursing, health professions, medicine and veterinary programs. Scoring Zacks Rank #2 with A-rated Value and Growth scores, Adtalem projects 19.6% long-term growth—attractive for education sector investors navigating demographic shifts.

The Bigger Picture

In volatile markets where calculating uncertainty becomes as important as spotting opportunity, GARP-filtered stocks offer a middle path. They’re not immune to drawdowns, but the combination of reasonable valuations, analyst validation (Zacks Rank), and genuine growth drivers provides a smoother ride than pure-play strategies. Whether markets pull back or push higher in 2026, these four candidates bring both a price anchor and a growth narrative to the table.