Ran a Quality + GARP screen this week… results were not what I expected
The last couple weeks have been straight-up exhausting. iran stuff shuts the Strait, Dow suddenly rips 1300 points off one ceasefire tweet, tariff headlines every five minutes and FinTwit is split between “buy everything right now” and “cash is king bro”. I got sick of doom-scrolling and reacting to every headline so I went back to basics and actually screened for companies I’d want to own through this chaos
I ran two screens, one for high-quality businesses (ROE, ROIC, gross margins, FCF and clean balance sheet all hitting at the same time) and one for GARP (Peter Lynch style - growth at a reasonable price). here’s what popped and why I think both matter more than ever right now
Quality screen first
Tariffs are basically a giant margin compression stress test. when your input costs spike (components, energy, rerouting supply chains) the winners are the ones whose customers literally can’t walk away. I used gross margin >30% as a rough filter for that pricing power
The actual screen was strict, ROE >15% and ROIC >12% and D/E <1.0 all at the same time. ROE by itself is easy to juice with leverage but forcing high ROIC with low debt means the business is genuinely earning well above its cost of capital without financial tricks. only about 50 names cleared it in the entire US market over $2B market cap
**Quality Screen Results**
|Company|ROE|ROIC|D/E|Why it stands out|
|:-|:-|:-|:-|:-|
||
|Manhattan Associates|\>15%|236%|<1.0|Supply chain software, $2.36 earned per $1 invested. Sticky in a disruption-heavy env.|
|IDEXX Laboratories|\>15%|\>12%|<1.0|Vet diagnostics, sticky recurring revenue, almost zero tariff exposure|
|Cintas|\>15%|\>12%|<1.0|Boring uniform rental compounding quietly for decades|
|NVIDIA|\>15%|\>12%|<1.0|Obvious name but cleared the strict quality filter too|
|Visa|\>15%|\>12%|<1.0|Classic high-margin asset-light business|
The names that caught my eye weren’t the usual suspects (yeah NVDA and Visa are obviously on there). it was stuff like Manhattan Associates sitting at 236% ROIC - supply chain software that somehow prints $2.36 for every dollar invested. in a disruption heavy environment that feels… not random. IDEXX (vet diagnostics, sticky recurring revenue, almost zero tariff pain). Cintas - the boring uniform rental guy that’s just quietly compounded for decades. not sexy, which is exactly why I like them right now
Then I layered GARP on top
Pure quality screens usually spit out mature compounders, which is great but a lot of them are trading at nosebleed valuations. GARP adds the “am I actually getting a decent price for this growth?” check
I used PEG <1.5 (P/E divided by EPS growth rate) plus real revenue growth to make sure earnings aren’t just buybacks or cost cuts. only 28 names passed
**GARP Screen Results**
|Company|PEG|P/E|EPS Growth|Note|
|:-|:-|:-|:-|:-|
||
|NVIDIA|0.4|\~34|66%|Lynch called sub-0.5 significantly undervalued if growth holds|
|First Solar|0.4|\~13|18%|Domestic maker, tariffs could be a tailwind not a headwind|
|EMCOR Group|0.4|\~26|30%|Electrical/mechanical contractor for data centers and infrastructure|
|Alphabet|0.8|\~25|34%|Looks cheap for what it's growing at on pure numbers|
Standouts
* NVIDIA at PEG 0.4 (not a typo). 66% EPS growth, P/E around 34. market is either pricing in Armageddon for AI or this is just tariff volatility freaking everyone out. Lynch would’ve called sub 0.5 “significantly undervalued” if growth holds
* First Solar at PEG 0.4. Domestic panel maker, tariffs could actually be a tailwind instead of a headwind. 18% EPS growth at P/E 13, kinda wild
* EMCOR Group (EME) at PEG 0.4. electrical/mechanical contractor for data centers, hospitals, infrastructure. 30% EPS growth at P/E 26. nobody really talks about this one but it’s been printing quietly
* Alphabet at PEG 0.8. 34% EPS growth at P/E 25. I know Google hate is basically a sport here but on pure numbers this looks cheap for what it’s growing
When I intersected both screens (quality and GARP) the list basically disappears. NVIDIA makes it. Netflix makes it (42% ROE, PEG 1.1, 27% EPS growth). Medpace Holdings makes it - CRO that runs clinical trials, 70% ROE, 155% ROIC, PEG 0.9. I’d never really looked at Medpace before but those numbers are kinda stupid
That overlap is basically my idea filter, quality says the business is actually exceptional, GARP says the market hasn’t fully woken up yet. rare combo
Note
this isn’t a “buy these tomorrow” list. every name still needs a real tariff check (how much do they actually import, how exposed is cross border revenue), a look at whether the quality metrics are still trending up or starting to roll over and some valuation context vs their own 5 year average
But in a market where daily swings are driven by tweets and tariff rumors instead of fundamentals, I’d rather sit in businesses with 30%+ gross margins and real free cash flow than chase momentum either way. that’s the whole point for me right now
Anyway, happy to dive into any of these names or the exact screen logic if people want. what screens have you guys been running lately? Curious what everyone else is actually doing