Zacks.com featured highlights: Teleflex, DST Systems, DuPont Fabros Technology, j2 Global, Heartland Financial USA and Acme United

For Immediate Release

Chicago, IL – September 06, 2016 - Stocks in this week’s article include: Teleflex Incorporated (TFX), DST Systems Inc. (DST), DuPont Fabros Technology, Inc. (DFT), j2 Global, Inc. (JCOM), Heartland Financial USA, Inc. ( HTLF) and Acme United Corp. (ACU).

Screen of the Week of Zacks Investment Research:

6 GARP Stocks Poised to Yield Robust Returns

Growth at a reasonable price or GARP investing is one of the popular strategies offering a blend of both growth as well as value investing. It helps an investor to get exposure to stocks that are undervalued and have impressive growth prospects. This strategy works best in a scenario when markets are rebounding from a slump. Though it is a blend of growth and value investing, it is quite different from the blend strategy, which seeks to build up a portfolio of both value and growth stocks.

Key Features of GARP

The GARP strategy seeks to offer an ideal investment by borrowing the best features of both value and growth investing. While investors following the GARP strategy give precedence to value ratios such as price-to-earnings (P/E) and price-to-book value (P/B) ratio, they also use earnings per share (EPS) growth rates and return on equity (ROE) like growth investors to identify potential stocks. However, the range of the values of metrics that are considered by GARP investing may differ from those that are considered by value or growth investors.

While value investors look for an extremely low P/E ratio to choose a company, investors following the GARP strategy focus on stocks that have relatively higher ratios but less than their respective industry average. Meanwhile, GARP investing chooses stocks with P/B ratios lower than their industries similar to value investors.

Separately, investors following the GARP strategy give priority to stocks with a track record of impressive EPS growth over those with extremely high growth rates. Companies that meet GARP investing criteria are believed to have past as well as expected growth rates between 10% and 20% over the next few years.

Another metric, which is borrowed by GARP investors from growth investing, is ROE. Like growth investors, the GARP strategy looks for stocks with higher ROE than their industry average.

Screening Parameters

Along with the criteria we discussed in the above section, we have also considered favorable Zacks Rank – Zacks Rank #1 (Strong Buy) or #2 (Buy) – to make the strategy more profitable.

• Zacks Rank less than or equal to #2
(Only Strong Buy and Buy rated stocks can get through.)

• Last 5-year EPS & projected 3–5 year EPS growth rates between 10% and 20%
(Strong EPS growth history and prospects ensure improving business.)

• ROE (over the past 12 months) greater than the industry average
(Higher ROE compared to the industry average indicates superior stocks.)

• P/E and P/B ratios less than X-industry average
(P/E and P/B ratios less than that of the industry indicate that the stocks are undervalued.)

Just these few criteria have narrowed down the universe of over 7,700 stocks to only six.

Here are the six stocks that made it through the screen:

Teleflex Incorporated (TFX) is primarily engaged in manufacturing, developing and supplying medical devices for different procedures in the medical industry throughout the globe. This Zacks Rank #2 stock has an average four-quarter positive earnings surprise of 7.1%.

DST Systems Inc. (DST) provides sophisticated information processing and computer software services and products. This Zacks Rank #2 stock has an average four-quarter positive earnings surprise of 7.8%.

DuPont Fabros Technology, Inc. (DFT) is a leading owner, developer, operator and manager of wholesale data centers and a real estate investment trust. In addition to a Zacks Rank #2, DuPont Fabros Technology also has an average four-quarter positive earnings surprise of 0.4%.

j2 Global, Inc. (JCOM) provides cloud-based communications and storage messaging services. This Zacks Rank #2 stock has an average four-quarter positive earnings surprise of 5.9%.

Heartland Financial USA, Inc. (HTLF) is a multi-bank holding company that provides full-service retail banking through bank subsidiaries. In addition to a Zacks Rank #2, Heartland Financial also has an average four-quarter positive earnings surprise of 11%.

Acme United Corp. (ACU) is involved in production and sale of medical products, and different items for school, office and home use. This Zacks Rank #2 stock has a last-quarter positive earnings surprise of 12.4%.

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Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.

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TELEFLEX INC (TFX): Free Stock Analysis Report
 
DUPONT FABROS (DFT): Free Stock Analysis Report
 
DST SYSTEMS (DST): Free Stock Analysis Report
 
J2 GLOBAL INC (JCOM): Free Stock Analysis Report
 
HEARTLAND FINCL (HTLF): Free Stock Analysis Report
 
ACME UTD (ACU): Free Stock Analysis Report
 
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