Hunting for growth shares at knockdown prices

In the 18 months after the EU referendum in mid-2016, growth shares were some of the stock market’s biggest winners. Strategies that zero in on small and mid-cap stocks with fast growing earnings did well. Strategies that chase factors like ‘value’ and ‘quality’ were left trailing in their wake. But while the EU vote was a springboard for equities, the Brexit ‘bump’ that propelled growth shares didn’t last. By early 2017 growth strategies were coming under pressure and there was a slump in the number of stocks passing their rules. That got worse, and over the past 18 months, growth and momentum strategies have, on average, underperformed almost every other investing style… until recently. Source Stockopedia Since the summer there’s been a pick up in the performance of growth strategies. While it’s too early to tell whether the market is turning bullish on fast-growing shares, it’s evidence at least that stocks offering “growth at a reasonable price” (GARP) are out there – if you know where to look. So far this year, the guru-inspired GARP strategy tracked by Stockopedia has achieved a steady return of 8.5%. Over five years, the…