FUNDAMENTAL VALUATION METHODOLOGY & AUTHORSHIP

The Discipline of Growth at a Reasonable Price

Arthur Pendelton

Valuation Developer & Financial Researcher

Arthur is an independent software developer, financial writer, and passionate practitioner of Peter Lynch's classic fundamental investment philosophy. Over two decades of auditing balance sheets and programming valuation algorithms, Arthur recognized that modern retail investors were trapped between two dangerous extremes: chasing unprofitable companies at 80x P/E or buying declining value traps at 5x P/E. Arthur developed GARP.DEV as an open client-side calculator to give independent investors the mathematical rigor needed to identify durable compounders trading at a PEG < 1.0 with an authentic margin of safety.

Regulatory Notice (FCC / FTC Truth in Advertising): Arthur Pendelton is a software engineer and private equity researcher, not a registered investment adviser (RIA), certified financial planner (CFP), or licensed securities broker. GARP.DEV offers educational valuation formulas and does not provide personalized investment advice or asset management services.

PEG < 1.0

Lynch Valuation Parity

A company's P/E multiple should logically match its percentage earnings growth rate. When PEG drops below 1.0, investors receive earnings growth at a discount.

PEGY Credit

Dividend Yield Adjustment

For established stalwarts, cash dividends return capital directly to shareholders. The PEGY metric adjusts growth to reward sustainable cash yields.

Margin of Safety

Graham & Dodd Integration

Synthesizing growth duration with Benjamin Graham's margin of safety to ensure portfolio resilience against earnings disappointments or macro drawdowns.

The Fallacy of Modern Valuation Extremes

Today's financial markets are polarized between two hazardous extremes:

The Hyper-Multiple Speculator: Investors paying 60x–100x P/E multiples for high-growth tech firms. Even if the underlying enterprise performs brilliantly, any deceleration from 40% growth to 25% growth sparks devastating multiple compression (-50% drawdowns).
The Deep Value Trap: Investors buying structurally impaired legacy businesses at 6x P/E multiples, failing to realize that return on invested capital (ROIC) is negative and secular disruption is eroding terminal value.

GARP occupies the profitable middle ground: identifying businesses growing earnings reliably at 15% to 25% per annum, yet trading at modest multiples of 14x to 22x P/E. Over multi-year horizons, the combination of earnings expansion and gradual multiple re-rating creates exponential wealth compounding.

Editorial & Analytical Governance

Every screening criterion, financial ratio definition, and article on GARP.DEV adheres to institutional corporate finance standards. We benchmark company data against audited SEC 10-K and 10-Q filings, stripping away non-operating one-time accounting gains to uncover authentic normalized earnings power.