Mike McGervey of McGervey Wealth Management takes a value approach with a growth objective. "We are traditionally seeking securities that have demonstrated strong earnings and sales growth, are amongst strong industry groups, and are also leading their industries in price performance," he says. "As such, it is typically more difficult to find a bargain."
McGervey says his shopping list of bargains includes First Cash Financial Services (FCFS), Herbalife (HLF) and Radiant Systems (RADS). These stocks are strong growth contenders but have valuations more comparable to those of value stocks, he says.His best bargain for Black Friday, though, is TRW Automotive (TRW). Michigan-based TRW supplies automotive systems, modules and components to global car original equipment manufacturers and related aftermarkets, which has made the stock an attractive bet for investors looking to play the recent initial public offering by General Motors. The stock currently trades at $48, more than double the share price at the end of 2009. Even so, McGervey says TRW's financial and valuation metrics are attractive to both bargain- and growth-hunters. He notes that TRW's price-to-earnings and price-to-sales ratios are 7.9 and 0.41, respectively, which are below the market average. In addition, the PEG ratio, which measures value relative to growth, is 1.53. That is an indication that investors aren't paying a massive premium for long-term growth. "That's not bad for a growth stock that has been on the run," McGervey says. "The stock has recently pulled back off its 52-week high by about 8%, creating an incentive buy opportunity which may still be available on Friday." -- Written by Robert Holmes in Boston.
>To contact the writer of this article, click here: Robert Holmes. >To follow Robert Holmes on Twitter, go to http://twitter.com/RobTheStreet. >To submit a news tip, send an email to: firstname.lastname@example.org.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV