3 growth stocks at a reasonable price
These picks are positioned nicely and score well in the overall, value and momentum categories.
Our Quadrix stock-rating system is not designed to focus on the highest growth stocks nor the deepest value stocks. Rather, the model is designed to reward stocks with broad-based strength.
Our system looks across both growth and value metrics, as well as variables related to financial strength, operating momentum, quality, earnings estimates, and relative share-price performance. In short, Quadrix works well at finding steady growers with broad-based fundamental strength and reasonable valuations. This is a variation on the "GARP" (Growth At a Reasonable Price) style of investing.
GARP has performed quite well this year, and I expect the market will continue to reward growth stocks selling for reasonable valuations.
Here we look at three stocks that are positioned nicely to benefit from continued support for GARP investing. Each of the stocks scores at least 80 (out of a possible 100) in three important Quadrix areas — Overall, Value, and Momentum.
My favorite insurance-related stock is The Chubb Corp. (CB), a leading provider of property and casualty insurance. The company has handily beaten earnings estimates in each of the last four quarters, and I suspect that streak will continue over the next few quarters.
The stock yields nearly 2 percent, and the dividend should be hiked within the next six months. Chubb is the type of "Steady Eddie" stock that rarely is at the top of the leader board in a given year but just churns out consistent returns year-in, year-out.
One somewhat surprising stock to pass this screen is a utility, New Jersey Resources (NJR). Utilities don't typically score well in our Quadrix system as a result of their slow-growth ways.
That New Jersey Resources scores well in both growth and value metrics speaks well of the stock's total-return potential. I like the yield of nearly 4 percent, and dividend growth should be above-average for the group. The stock ranks as one of the more attractive plays in the utility sector.
The final stock I'll mention is Skyworks Solutions (SWKS). Its high-performance analog semiconductors are used in a variety of markets, including handsets, wireless infrastructure, aerospace/defense, automotive, CATV, energy, medical, and test and measurement.
Some of the company's components can be found in Apple's new 5S phone. Skyworks is not the type of tech company that investors usually equate with "value."
However, the company's Quadrix Value score of 87 indicates that the shares are far from overpriced. And growth potential remains attractive. For investors looking for a growth-value combo play with some zip potential, these shares should fit the bill.
More from MoneyShow.com
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
Stocks are facing some serious resistance as the bears tear into the market's respite.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.