Growth investors love buying stocks with higher P/E ratios because there are high expectations the company will see significant growth. However, those high expectations come with higher prices for the stocks and GARP (Growth at Reasonable Price) investors like to find investments that have been slightly under valued by the market. Higher P/E numbers tend to indicate businesses that are actually over valued, which is why they are not sought out by GARP investors.

Source: http://www.investorguide.com/igu-article-976-stock-strategies-understanding-garp-stock-investing-strategy.html

Tags: P/E ratios, investing strategies, investment planning, GARP investors, growth investors

  

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