Kinross Gold Corp (NYSE:KGC) Fits Louis Navellier’s High-Growth Stock Criteria

Investors looking for high-growth stocks often use systematic screening methods to find companies with solid fundamentals and momentum. One approach is detailed in Louis Navellier’s The Little Book That Makes You Rich, which highlights eight key rules for picking strong growth stocks. These rules focus on earnings revisions, sales and earnings growth, profitability, cash flow, and return on equity, metrics that together indicate a company’s ability to maintain and improve its performance. Kinross Gold Corp (NYSE:KGC), a gold mining company with operations in the Americas and Africa, recently appeared in a screen based on Navellier’s method. Here, we look at how KGC fits these growth-focused rules.

How Kinross Gold Corp Fits Navellier’s Growth Rules

1. Positive Earnings Revisions
   Analysts have increased Kinross’s next-quarter EPS estimates by 62.4% over the last three months, a clear sign of upward momentum. This matches Navellier’s first rule, as higher revisions often lead to earnings beats and stock price gains.

2. Positive Earnings Surprises
   Kinross has beaten EPS estimates in three of the last four quarters, with an average beat of 20.5%. Consistent outperformance shows management’s ability to deliver and analysts’ tendency to underestimate the company’s profitability, a key trait of growth stocks.

3. Increasing Sales Growth
   The company’s revenue grew 34.4% year-over-year (TTM), with quarterly sales up 41.7%. Rising top-line growth is important for Navellier’s strategy, as it reflects higher demand and the ability to scale operations.

4. Expanding Operating Margins
   Kinross’s operating margin jumped 81.7% over the past year, reaching 38.2%. This improvement points to better cost control and pricing strength, both crucial for maintaining profitability during growth.

5. Strong Cash Flow
   Free cash flow rose 356.4% year-over-year, highlighting Kinross’s ability to generate cash for reinvestment or shareholder returns. Navellier values cash flow as a sign of financial health and sustainable growth.

6. Earnings Growth
   Kinross’s EPS grew 151.1% over the past year, with quarterly EPS up 214.3%. Such strong bottom-line growth is a key part of the screen, as it often links to stock price momentum.

7. Positive Earnings Momentum
   The company’s current quarterly EPS growth (214.3%) is much higher than its year-ago level (where growth was flat). This acceleration meets Navellier’s need for improving earnings trends.

8. High Return on Equity (ROE)
   Kinross’s ROE of 22.3% ranks in the top 7% of its industry peers, showing efficient use of shareholder capital, a trait Navellier links to strong growth companies.

Fundamental Strengths and Valuation

Kinross’s fundamental analysis report points to other strengths:

• Profitability: High margins (25.2% net, 38.2% operating) and strong returns on equity and invested capital (22.3% and 14.9%, respectively).
• Balance Sheet: A low debt-to-equity ratio (0.18) and good liquidity (current ratio of 2.01) reduce financial risk.
• Valuation: Trading at a P/E of 16.2, Kinross is cheaper than 81% of its industry peers, offering some safety despite its growth path.

Points for Investors to Note

While Kinross fits Navellier’s growth rules well, investors should consider:

• Commodity Exposure: Gold prices heavily affect revenue and margins.
• Future Estimates: Analysts expect slower EPS growth (5.95% annually) and a small revenue drop (-1.05%), suggesting potential challenges ahead.

Find More Growth Stocks

For investors interested in applying Navellier’s method to other stocks, the original screen lists other high-growth options.

Disclaimer: This analysis is not investment advice. Do your own research and assess your risk tolerance before making investment decisions.