Would you like 29.2% average annual investment returns for 13 straight years? That's the incredible record Peter Lynch achieved while running Fidelity's Magellan Fund from 1977 to 1990, when he retired.

Since then, Lynch has shared his common sense investing strategy in several books, beginning with One Up On Wall Street. He popularized the growth at a reasonable price (GARP) investing approach.

GARP investing doesn't necessarily have rigid boundaries for stock inclusion or exclusion, but the price-to-earnings growth (PEG) ratio serves as a solid benchmark when applying fundamental metrics. The PEG tells us the ratio between a company's P/E ratio (valuation) and the expected earnings growth rate over the next several years. Stocks with a PEG of 1 or less show investors that P/E ratios are in line with expected earnings growth. This metric helps GARP investors identify stocks trading at reasonable prices.

With stocks trading at record prices, it's more important than ever to identify stocks with long-term potential trading at reasonable prices. Let's take a look at three stocks that Peter Lynch would love.

Origami bull is intimidating origami bear

Image source: Getty Images.

1. eHealth: Baby boomer health needs won't let up soon

The baby boomer market has been a focus for online insurance marketplace eHealth (NASDAQ:EHTH), a company with a PEG of 0.89 that passes the PEG benchmark for GARP stocks. The company offers thousands of Medicare-oriented insurance products, such as Medicare Advantage, Medicare Supplement, and Medicare Part D plans.

To a smaller degree, eHealth offers individual and family health insurance, small business insurance, and ancillary health insurance products from over 170 health insurance carriers.

Earnings released Feb. 20 showed investment in the baby boomer market is paying off. The fiscal year 2019 Medicare segment revenue grew 112% over 2018 results. In 2019, the segment's revenue was $447 million, versus $211 million in 2018. Profit from the Medicare segment was $155 million in 2019 versus $61 million in 2018, a 155% increase.   

Overall, in the fiscal year 2019 eHealth generated revenue of $506.2 million, or 101% annual growth over the fiscal year 2018 revenue of $251.4 million. 

As a GARP investment, eHealth checks all the boxes and should reward growth investors.

2. Delta Airlines: The best in the air will always attract travelers

Delta Airlines (NYSE:DAL), with a PEG ratio of 0.57, is aggressively working to keep the momentum going and lead the industry in growth.

First, the company is systematically replacing inefficient aircraft with new equipment designed to use less fuel and better standardize the fleet, producing fuel and maintenance savings.

Second, through joint ventures, Delta is leveraging scale. As of the end of 2019, the company reported destinations served are increasing from 549 to 982, with countries served increasing from 113 to 143.

Finally, renewing its partnership with American Express (NYSE:AXP) for another 10 years was important, as it is a direct link to consumers and a way to cement loyalty with a range of rewards. The relationship is symbiotic, with Delta representing 8% of American Express billings and 21% of cardmember loans in 2018. For Delta, the American Express contribution to revenue was $1.4 billion in 2010 and is estimated to hit $7.0 billion in 2023. 

Novel coronavirus outbreak concerns have caused Delta to cancel flights to and from China through April 30. While this will affect financial results in the short run, Delta has strong catalysts in place to be a GARP stock for a long-term investment.

3. LPL Financial: A company serving independent financial advisors

LPL Financial Holdings (NASDAQ:LPLA), with a PEG ratio of 0.75, is a broker-dealer serving and supporting the practices of more than 16,000 independent financial advisors and about 700 financial institutions.

The company looks to drive growth organically by attracting more assets from existing clients, which means advisors have to work smarter. It can be challenging, but prospecting existing clients is much more cost-efficient than finding new clients, and leads to all-important referrals. For fiscal 2019 LPL Financial organic net new assets grew at 3.8%, up from 2.3% growth a year ago.

The effort showed in year-over-year financial comparisons as well. Net income rose 27% year over year, from $439 million in 2018 to $560 million in 2019. Diluted earnings per share leaped 36%, from $4.85 to $6.78.

LPL Financial's initiatives for continued growth in 2020 include making available to advisors a no-transaction-fee ETF that builds on the success of the no-transaction-fee mutual fund solution.

Additionally, LPL Financial is focused on automating the six primary workflows where advisors spend approximately 80% of their time. Improving technical tools is critical for advisors to more effectively leverage client data to drive efficiency across all of their workflows.

LPL Financial exhibits all the hallmarks of a GARP stock that should reward investors with growth over the long haul.