For investors looking for a structured, rule-driven way to find stocks with high growth, the method described in Louis Navellier's "The Little Book That Makes You Rich" presents a strong framework. The approach centers on eight basic pillars meant to find companies showing better and quickening financial results. These measures include good earnings revisions and surprises, rising sales, widening margins, solid cash flow, earnings growth, positive earnings momentum, and a high return on equity. The aim is to methodically sort for companies that are not only expanding, but doing so with greater efficiency and earnings, traits that frequently come before notable rises in stock price.
A recent filter using this strict group of measures identified Amphenol Corp. Class A (NYSE:APH), a worldwide top company in the design and production of connectors and sensors. A detailed look shows how Amphenol's present financial standing matches well with Navellier's growth-focused ideas.
Matching the "Little Book" Measures
The given information shows Amphenol is performing well across the approach's main measures:
- Good Earnings Revisions & Surprises: Analyst optimism is increasing, with the average EPS forecast for the next quarter moved higher by 12.64% in the past three months. Also, the company has a flawless history of surpassing forecasts, beating EPS estimates in each of the past four quarters by an average of 15.07%. Steady positive surprises often lead analysts to raise future forecasts, creating a pattern of increasing expectations.
- Strong Sales and Earnings Growth: Amphenol is showing forceful top and bottom-line growth. Revenue increased 51.71% year-over-year and 49.12% last quarter. More notable is the earnings growth, with EPS jumping 76.72% over the past year and 76.36% last quarter. This quickening in earnings is a central part of the approach.
- Widening Profitability and Solid Cash Flow: The company is not only selling more, it is becoming more profitable. Its operating margin has widened by 21.42% over the past year, showing very good cost management and pricing ability. At the same time, free cash flow—important for supporting growth and shareholder rewards—has increased by a notable 103.70%.
- High Return on Equity (ROE): Amphenol produces a very good return on equity of 31.84%, well above the approach's lowest limit of 10%. This shows management is very good at producing earnings from shareholder money.
Basic Financial Soundness and Price Context
ChartMill's basic analysis report gives APH a total score of 7 out of 10. The report points out the company's very good profitability (score of 9), with sector-leading margins and returns on capital. Its growth picture is also scored high (9), backed by the strong past and expected future growth rates mentioned before.
The analysis mentions some small worries about financial soundness (score of 6), mainly connected to a higher debt-to-equity ratio, although the company keeps good liquidity measures. On price, the stock seems costly on a normal P/E basis, but the report indicates this could be reasonable given its high profitability and anticipated earnings growth of over 20% each year. You can see the complete, detailed analysis in the full basic analysis report for APH.
Analyst Opinions and Market Standing
Amphenol's results are supported by its important part in long-term structural trends, including the spread of electronic parts in automotive, industrial, and aerospace uses, and the continuing development of cloud and mobile network systems. This place lets it grow quicker than the wider industrial market. Analyst opinion mostly shows belief in the company's capacity to keep taking market share and handling supply chains well, even in a difficult broader economic setting. The steady earnings beats and upward revisions are clear proof of this operational performance.
A Model for More Study
Amphenol Corp. acts as a clear example of the kind of company the "Little Book" filter tries to find: one with quickening, high-standard growth across several financial areas. For investors wanting to use this methodical approach to discover other possible choices, the preset filter is ready for use and change. You can examine the present filter results and modify the measures based on your own market view through this link.
Disclaimer: This article is for information only and is not financial advice, a support, or a suggestion to buy, sell, or hold any security. The "Little Book" filter is a model based on past measures and does not promise future results. Investing has risk, including the possible loss of the original amount. Always do your own complete study and think about your personal financial position and risk comfort before making any investment choices.