As markets push higher, with the S&P500 maintaining a positive trend in both the long and short term, investors are actively searching for quality companies with strong fundamentals that can justify their valuations. One strategy designed to pinpoint superior growth stocks comes from Louis Navellier’s The Little Book That Makes You Rich. This approach focuses on eight key financial rules, including positive earnings revisions, earnings surprises, accelerating sales and earnings growth, expanding margins, strong cash flow, and a high return on equity. By filtering for these specific criteria, the strategy aims to uncover companies with solid operational momentum and the potential for continued outperformance.
Recently, a screen based on this methodology identified Newmont Corp (NYSE:NEM). As one of the world’s leading gold producers, the company has demonstrated financial traits that align closely with Navellier’s principles, supported by strong recent performance and attractive valuation metrics.
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Recent Performance and Fundamental Strength
At the core of Navellier’s strategy is the search for companies that consistently beat analyst expectations and show accelerating growth. Newmont’s recent results paint a strong picture. The company has reported four consecutive positive earnings surprises over the last four quarters, with an average EPS estimate beat of 25.42%. This track record of exceeding expectations is a critical signal in the Little Book method, as it often forces analysts to revise their future estimates upward, driving share price momentum.
Furthermore, the company’s revenue and earnings growth are noteworthy. Revenue has grown by 21.34% year-over-year (TTM), and quarter-over-quarter sales growth stands at an impressive 45.85%. Earnings Per Share (EPS) has surged 104.78% over the last year, with quarterly EPS growth reaching 131.99%. This pattern of strong top-line and bottom-line growth is a hallmark of the firms Navellier seeks, as it demonstrates that the company is not only selling more but also converting those sales into higher profits.
Valuation and Profitability Metrics
Despite the strong growth, Newmont’s current valuation suggests it is trading at a reasonable price. The stock has a Price/Earnings ratio of 12.97, which is well below the broader S&P500 average of roughly 27.47. Looking forward, the Price/Forward Earnings ratio sits at 10.33. This relative cheapness is further emphasized by the PEG Ratio, which compensates the P/E for expected earnings growth, indicating a potentially undervalued opportunity.
The company also performs well in key profitability and health metrics that the strategy rewards. The Return on Equity (ROE) is 20.92%, well above the 10% minimum set by the Little Book screen, placing Newmont in the top 10% of its industry peers. Additionally, the Operating Margin has expanded by 52.89% over the past year, while Free Cash Flow growth has increased by 163.44%. These figures point to a company that is not only profitable but also increasingly efficient and financially strong, with a Debt to Free Cash Flow ratio of just 0.75.
Analyst Views and Summary
According to the fundamental analysis report, Newmont (NEM) earns a solid rating of 7 out of 10 compared to 163 peers in the Metals & Mining industry. The report highlights that the stock has outstanding health and profitability ratings, belonging to the best in its sector. Key strengths include its industry-leading profit margins (with a net profit margin of 31.25% and an operating margin of 48.19%) and its strong solvency, as evidenced by an Altman-Z score of 4.36.
While the market remains in a positive uptrend, Newmont appears to fit the profile of a quality growth stock as defined by Navellier’s methodology. The combination of consistent earnings surprises, accelerating revenue and EPS, expanding margins, a high ROE, and a reasonable valuation provides a foundation that could appeal to growth investors looking for fundamentally sound companies. For full details, you can view the complete fundamental analysis report for NEM.
More Screening Results
If you are interested in exploring other potential candidates that meet these strict criteria, you can review the full list of stocks that passed this screen. Find all results and explore the dynamic screener settings by following the link below.
Ready to discover more stocks with similar characteristics? Click here to access the full screening results based on The Little Book That Makes You Rich methodology.
Disclaimer: This article is for informational and educational purposes only and does not constitute investment advice. Always conduct your own research and consider your financial situation before making any investment decisions.