Zacks.com featured highlights include Kontoor Brands, Envista, Western Digital and LATAM Airlines

For Immediate Release

Chicago, IL – August 13, 2025 – Stocks in this week’s article are Kontoor Brands KTB, Envista NVST, Western Digital WDC and LATAM Airlines Group LTM.

4 GARP Stocks with Solid PEG Scores for Strong Portfolio Gains

In the equity market, investments need to be prudently hedged to overcome uncertainties and limit losses related to external shocks. A question that arises often is whether one should resort to a value strategy that seeks discounted stocks or opt for growth investing in times of extreme market instability.

The investing track of the Oracle of Omaha over the past few decades and his gradual shift from being a pure-play value investor to a GARP (growth at a reasonable price) investor might give us all the answers.

Per the GARP theory, the strategic mingling of growth and value-investing principles gives us a hybrid strategy, offering an ideal investment by utilizing the best features of both. What GARPers look for is whether or not the stocks are somewhat undervalued and have solid, sustainable growth potential (Investopedia).

Several stocks that have surged significantly in recent years have demonstrated the overwhelming success of this hybrid investing strategy over pure-play value and growth investments. Here, we will discuss the success of four such stocks. These include Kontoor Brands, Envista, Western Digital and LATAM Airlines Group.

A Few More Words on GARP

GARP investing gives priority to one of the popular value metrics — the price/earnings growth (PEG) ratio. Although it is categorized under value investing, this strategy follows the principles of both growth and value investing.

The PEG ratio is defined as (Price/ Earnings)/Earnings Growth Rate

It relates the stocks' P/E ratio with the future earnings growth rates.

While P/E alone gives an idea of stocks that are trading at a discount, PEG, while adding the growth element to it, helps identify stocks with solid future potential.

A lower PEG ratio, preferably less than 1, is always better for GARP investors.

Say, for example, if a stock's P/E ratio is 10 and the expected long-term growth rate is 15%, the company's PEG will come down to 0.66, a ratio indicating both undervaluation and future growth potential.

Unfortunately, this ratio is often neglected due to investors' limitations in calculating the future earnings growth rate of a stock.

There are some drawbacks to using the PEG ratio though. It does not consider the very common situation of changing growth rates, such as the forecast of the first three years at a very high growth rate, followed by a sustainable but lower growth rate over the long term.

Hence, PEG-based investing can be even more rewarding if some other relevant parameters are also taken into consideration.

Here are four out of the 14 stocks that qualified the screening:

Kontoor Brands: headquartered in Greensboro, NC, this is a lifestyle apparel company that designs, produces, markets, and distributes denim, apparel, footwear, and accessories under brands such as Wrangler, Lee, and Rock & Republic. Operating through its Wrangler and Lee segments, Kontoor Brands serves customers worldwide across retail, specialty, department store, and online channels in the Americas, Europe, the Middle East, Africa and the Asia-Pacific.

Kontoor Brands can also be an impressive GARP investment pick with its Zacks Rank #2 and a Value Score of B. Apart from a discounted PEG and P/E, the stock has an impressive long-term expected growth rate of 8%.

You can see the complete list of today's Zacks #1 Rank stocks here.

Envista: Headquartered in Brea, CA, Envista is a global family of more than 30 dental brands, including Nobel Biocare, Ormco, DEXIS and Kerr, built through the acquisition and integration of over 25 leading dental businesses. Envista's diversified portfolio spans implant-based tooth replacements, orthodontics, digital imaging, diagnostics, restoratives, endodontics, infection prevention, rotary instruments and loupes, serving a wide range of clinical needs for dental professionals worldwide.

NVST stock can also be an impressive GARP investment pick with its Zacks Rank #1 and a Value Score of B. Apart from a discounted PEG and P/E, Envista has a solid long-term expected growth rate of 16.8%.

Western Digital: Headquartered in San Jose, CA, Western Digital is a developer and manufacturer of data storage devices and solutions based on NAND flash and hard disk drive technologies, serving Cloud, Client, and Consumer end markets with products used in PCs, servers, NAS devices, gaming consoles, DVRs and other electronics. The company reported fiscal 2025 revenues of $9.5 billion and competes with major players such as Intel, Micron, Samsung Electronics, Seagate Technology and Toshiba Corporation.

Western Digital stock can be an impressive value investment pick with its Zacks Rank #1 and a Value Score of B. Apart from a discounted PEG and P/E, WDC also has an impressive long-term expected growth rate of 13.8%.

LATAM Airlines: Headquartered in Santiago, Chile, LATAM Airlines is Latin America's leading airline, operating domestic services across Brazil, Chile, Peru, Colombia, and Ecuador, as well as regional and long-haul flights, supported by cargo operations through belly space and dedicated freighters. LATAM's focus on premium traffic presents significant opportunities for revenue growth and margin expansion.

LATAM can also be an impressive value investment pick with its Zacks Rank #1 and a Value Score of A. Apart from a discounted PEG and P/E, the stock also has a solid long-term expected growth rate of 22%.

You can get the rest of the stocks on this list by signing up now for your 2-week free trial to the Research Wizard and start using this screen in your own trading. Further, you can also create your own strategies and test them first before taking the investment plunge.

The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in, and see what gems come out.

Click here to sign up for a free trial to the Research Wizard today.

For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/2702568/4-garp-stocks-with-solid-peg-scores-for-strong-portfolio-gains

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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