Kinross Gold Corp (NYSE:KGC) Passes Rigorous Growth Screen Based on Navellier's Strategy

In the world of growth investing, few strategies have received as much notice as the one detailed in Louis Navellier’s The Little Book That Makes You Rich. Published in 2007, the book explains a disciplined method for finding high-growth stocks using eight basic rules. These standards center on earnings momentum, profitability, cash flow, and operational efficiency, all intended to find companies set for improved performance. One stock that recently appeared from a screen based on these ideas is KINROSS GOLD CORP (NYSE:KGC), a Toronto-based gold producer with a worldwide set of mining assets.

The screening process uses Navellier’s eight rules strictly, searching for companies that display:

• Positive earnings revisions and surprises
• Increasing sales and earnings growth
• Growing operating margins
• Good cash flow generation
• High return on equity

Here is a detailed view of how Kinross Gold matches these standards:

Positive Earnings Revisions and Surprises
A central idea of Navellier’s method is that upward revisions in earnings estimates frequently come before strong stock gains. Kinross displays a significant 64.32% rise in the next quarter’s EPS estimates over the last three months, showing rising analyst belief. Also, the company has exceeded earnings predictions in three of the past four quarters, with an average beat of 20.46%. These numbers imply that Kinross is doing well and also beating cautious forecasts, a good sign for momentum investors.

Sales and Earnings Growth
Increase in revenue and earnings is vital for any company wanting to be called a “growth stock.” Kinross reported a 34.40% year-over-year rise in revenue and a notable 41.74% quarter-over-quarter sales increase. More impressive is the company’s earnings growth: EPS jumped 151.06% over the past year and 214.29% compared to the same quarter last year. This kind of strong growth points to good operational performance and helpful market conditions for gold.

Operating Margin Expansion
A main sign of getting better profitability is growing operating margins. Kinross’s operating margin increased by 81.67% over the past year, showing the company’s skill in turning higher revenues into profits more effectively. This is especially key in the capital-heavy mining sector, where managing costs while increasing production is important for lasting growth.

Cash Flow Strength
Free cash flow is crucial for growth, allowing companies to reinvest, lower debt, or give capital to shareholders without needing much outside funding. Kinross produced a striking 356.37% growth in free cash flow over the past year. This amount of cash creation backs future exploration and development and also improves the company’s financial health.

High Return on Equity
Return on equity (ROE) shows how well a company uses shareholder money to create profits. Kinross’s ROE is at 22.29%, much higher than the lowest 10% limit set in Navellier’s screen. A high ROE is often linked to efficient management and a competitive edge, both wanted features in a growth investment.

Beyond these screening measures, a full fundamental analysis of Kinross points out more positives. The company has a good profitability rating, helped by top-level margins and returns on capital. Its balance sheet is sound, with acceptable debt levels and good liquidity. Valuation measures also seem fair compared to industry rivals, particularly when looking at the company’s strong recent performance. Still, it should be mentioned that analyst forecasts indicate a possible reduction in growth over the next few years, which may need close watching.

It is essential to understand that the mining sector is naturally cyclical and affected by commodity prices, geopolitical issues, and operational dangers. While Kinross now fits well with growth standards, investors should think about these sector-specific factors.

For those wanting to look into other companies that fit similar growth standards, the screen used for this study is open to the public. View more results from this growth screen here.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own research and consult with a qualified financial advisor before making investment decisions.