These growth stocks are trading for really cheap, Barclays says

Published Sun, Feb 13 20229:05 AM EST

Jesse Pound @/in/jesse-pound @jesserpound

There may be a lot of uncertainty about what comes next for markets, but some stocks with strong growth prospects may be too cheap for investors to pass up, according to Barclays. The investment firm put together a list of stocks it describes as "growth at a reasonable price." The strategy, also known as GARP, is a common investing approach among professional fund managers. The strategy focuses on finding stocks that have solid revenue growth but not sky-high valuations for sales or earnings, like is often seen in newly public technology companies. The list seeks to capture "companies that are trading at a reasonable valuation relative to the potential revenue growth that Barclays sees for the upcoming year," Barclays said in the Feb. 6 note. The parameters are for large-cap stocks with overweight ratings from Barclays analysts, at least 10% upside to price targets, and a price-to-estimated sales ratio that was below both the sector valuation and the stock's 5-year average. The list includes many stocks tied to the consumer economy, including Southwest Airlines and Tapestry . The 2022 economy could be particular beneficial for consumer service stocks, according to Barclays, which would include Southwest. "Our outlook for the US economy in 2022-23 is based, in part, on the unwind of the shock to relative demand and relative prices as the effects of the pandemic on behavior diminish. Recent data suggest that consumer spending may be shifting back to services," the note said. There are two shipping companies on the list in FedEx and J.B. Hunt Transportation . FedEx has underperformed the broader market year to date, shedding more than 10%, but it does sport a dividend yield of roughly 1.3%. One stock on the list that is significantly cheaper than it was just a few weeks ago is PayPal . The payments stock closed at $175.80 per share on Feb. 1, leading into its fourth-quarter earnings report. Then, PayPal delivered weaker-than-expected guidance for earnings and sales , and the stock has tumbled more than 34% since. For investors looking for a stock that has held up better than that during the turbulent start to 2022, real estate investment trust Ventas may fit the bill. The stock, which is focused on health care real estate, is down less than 1% since the end of December. -CNBC's Michael Bloom contributed to this report.

A FedEx plane at the company's distribution hub at the Los Angeles International Airport.

Patrick T. Fallon | Bloomberg | Getty Images

There may be a lot of uncertainty about what comes next for markets, but some stocks with strong growth prospects may be too cheap for investors to pass up, according to Barclays.