Best Stocks for Peter Lynch-Style GARP Investing
Last updated:
Peter Lynch ran the Fidelity Magellan Fund from 1977 to 1990, delivering a 29.2% average annual return that made it the best-performing mutual fund in the world. His approach — Growth at a Reasonable Price (GARP) — sits at the intersection of growth and value investing. Lynch didn't chase the hottest growth stocks regardless of price, and he didn't buy cheap stocks with no growth. He wanted both: companies growing earnings at 15-25% per year that you could buy at a PEG ratio under 1.0.
The Lynch-inspired preset weights Growth at 35% — the highest of any preset except Wood — reflecting his focus on earnings and revenue acceleration. But Valuation carries an equally serious 25%, which is what separates Lynch from pure growth investors. The PEG ratio (price-to-earnings divided by growth rate) is Lynch's signature metric: a stock growing earnings at 20% with a P/E of 20 has a PEG of 1.0 — fairly valued. A PEG below 1.0 means you're buying growth at a discount. Carrying high Growth and high Valuation weights together pushes this preset toward the rare cheap-growth names rather than generic all-rounders. Quality at 25% ensures the growth is backed by real profitability, while Moat is held to just 5% — Lynch was happy to own fast growers before they had built a wide moat. Risk at 10% reflects Lynch's willingness to accept higher volatility in exchange for growth.
Lynch popularized the idea that individual investors have advantages over Wall Street professionals — you encounter potential investments every day as a consumer, employee, and citizen. His famous advice to 'invest in what you know' wasn't about buying stock in your favorite restaurant. It was about recognizing when a company you understand is growing faster than its stock price reflects. The stocks below represent today's best GARP opportunities: fast-growing companies that the market hasn't fully priced.
Lynch Inspired Preset Weights
Top Lynch Inspired Stocks: Who Ranks Highest and Why
Futu Holdings Limited leads the Lynch-style ranking at 93, combining strong growth (95) with an attractive valuation (100). This is classic GARP: fast growth that the market hasn't fully priced in.
Palomar Holdings, Inc. scores 91, with a growth score of 100 and quality of 86. The growth is backed by real profitability, not just revenue expansion at any cost.
Atour Lifestyle Holdings Limited earns 89 — its combination of growth (96) and valuation (89) suggests a PEG-friendly opportunity that Lynch would investigate further.
Kanzhun Limited scores 88 with strong growth metrics and reasonable pricing — the GARP sweet spot Lynch built his legendary track record on.
Sezzle Inc. scores 87 with strong growth metrics and reasonable pricing — the GARP sweet spot Lynch built his legendary track record on.
Full Lynch Inspired Ranking: Top 25 Stocks
| # | Stock | Sector | Score | Q | M | G | R | V |
|---|---|---|---|---|---|---|---|---|
| 1 | FUTU | Financial Services | 93 | 100 | 50 | 95 | 70 | 100 |
| 2 | PLMR | Financial Services | 91 | 86 | 34 | 100 | 100 | 91 |
| 3 | ATAT | Consumer Cyclical | 89 | 89 | 29 | 96 | 91 | 89 |
| 4 | BZ | Industrials | 88 | 87 | 47 | 89 | 100 | 90 |
| 5 | SEZL | Financial Services | 87 | 96 | 26 | 100 | 91 | 70 |
| 6 | WDO.TO | Basic Materials | 87 | 85 | 27 | 85 | 100 | 98 |
| 7 | SLDE | Financial Services | 87 | 100 | 28 | 83 | 74 | 94 |
| 8 | AU | Basic Materials | 86 | 85 | 42 | 85 | 97 | 93 |
| 9 | KGC | Basic Materials | 86 | 84 | 20 | 85 | 99 | 96 |
| 10 | EDV.TO | Basic Materials | 85 | 85 | 27 | 85 | 87 | 96 |
| 11 | PAC | Industrials | 85 | 87 | 36 | 84 | 74 | 98 |
| 12 | HALO | Healthcare | 85 | 99 | 63 | 83 | 49 | 91 |
| 13 | INCY | Healthcare | 85 | 94 | 44 | 75 | 100 | 92 |
| 14 | FSLR | Energy | 85 | 83 | 48 | 92 | 96 | 80 |
| 15 | OGC.TO | Basic Materials | 85 | 83 | 28 | 85 | 85 | 97 |
| 16 | GFI | Basic Materials | 84 | 85 | 28 | 85 | 78 | 97 |
| 17 | DPM.TO | Basic Materials | 84 | 77 | 27 | 85 | 100 | 93 |
| 18 | HMY | Basic Materials | 84 | 82 | 28 | 85 | 69 | 100 |
| 19 | DLO | Technology | 83 | 72 | 53 | 89 | 76 | 95 |
| 20 | NEM | Basic Materials | 83 | 76 | 32 | 84 | 95 | 94 |
| 21 | EVR | Financial Services | 83 | 80 | 42 | 89 | 93 | 80 |
| 22 | CPRX | Healthcare | 82 | 91 | 42 | 79 | 100 | 80 |
| 23 | TSM | Technology | 82 | 73 | 82 | 78 | 95 | 92 |
| 24 | PDD | Consumer Cyclical | 82 | 91 | 50 | 71 | 77 | 98 |
| 25 | B | Basic Materials | 82 | 71 | 33 | 82 | 100 | 95 |
Apply this preset to any stock in the dashboard
Try Lynch Inspired PresetFrequently Asked Questions
What is Peter Lynch's investment strategy?
Lynch practiced Growth at a Reasonable Price (GARP) — seeking companies with strong earnings growth that are reasonably valued. His signature metric was the PEG ratio: a stock's P/E ratio divided by its earnings growth rate. A PEG under 1.0 meant growth was underpriced. He categorized stocks into six types (slow growers, stalwarts, fast growers, cyclicals, turnarounds, and asset plays) and tailored his analysis to each category. The UQS Lynch preset captures this by weighting Growth (35%) and Valuation (25%) as the dominant pillars.
How do you find stocks like Peter Lynch?
Lynch recommended starting with what you know — if you notice a store that's always packed, a product everyone uses, or a service that's rapidly expanding, research the company behind it. Then check the fundamentals: is earnings growth strong and accelerating? Is the PEG ratio below 1.0? Does the company have low debt? Is the story still intact or has Wall Street already priced in the growth? The UQS scoring system automates the quantitative part of this analysis across 6,400+ stocks, ranking them by the metrics Lynch prioritized.
What does 'invest in what you know' mean?
Lynch's famous advice is often misunderstood. He didn't mean you should buy stock in your favorite restaurant because you like the food. He meant that as a consumer, employee, or industry professional, you encounter trends and companies before Wall Street analysts do. A nurse might notice a hospital system switching to a new medical device. A software developer might see a tool gaining rapid adoption. These observations are starting points for research — you still need to verify the investment case with financial analysis, competitive assessment, and valuation work.
What is a good PEG ratio for growth stocks?
Lynch considered a PEG ratio below 1.0 attractive and above 2.0 expensive. A PEG of 1.0 means you're paying proportionally for growth — a company growing at 20% with a P/E of 20. A PEG of 0.5 means growth is cheap (P/E of 10 with 20% growth). The UQS Valuation pillar incorporates PEG alongside earnings yield, P/FCF, and EV/EBITDA, so stocks that score high under the Lynch preset tend to have favorable PEG ratios combined with other valuation metrics.