In growth investing, few methods have received as much notice as the one Louis Navellier described in his 2007 book, "The Little Book That Makes You Rich." The plan is based on a step-by-step process for finding leading growth stocks using eight clear, measurable rules. These rules concentrate on earnings momentum, sales increases, profit growth, and sound finances, trying to find companies that are not only increasing but speeding up in their financial results. This strict filter looks for stocks with positive earnings revisions and surprises, growing margins, good cash flow, and high returns on equity, giving a short list of options for investors looking for active growth.
One firm that now appears from using this filter is PJT Partners Inc, A (NYSE:PJT). As a top advisory firm focused on mergers and acquisitions, restructuring, and fundraising, PJT works in the active capital markets area. Recent fundamental information indicates the company is displaying the precise qualities Navellier's approach aims to find.
Matching the "Little Book" Rules
A detailed look at PJT's financial numbers shows a solid fit with the main ideas of the growth plan. The given information points show the company is performing well across many of the eight rules.
- Positive Earnings Revisions & Surprises: Analysts have increased their EPS estimate for the next quarter by more than 4% in the past three months, a main sign of better forward outlook. Also, PJT has a complete history of surpassing forecasts, beating EPS estimates in all of the last four quarters by an average of more than 25%.
- Strong Sales and Earnings Growth: The company is displaying solid top-line and bottom-line growth. Revenue increased 23.16% year-over-year and an even greater 37.01% quarter-over-quarter. Earnings growth is more notable, with EPS rising 56.16% over the last year and almost 99% in the latest quarter.
- Growing Profitability and Good Cash Flow: A main rule searches for increasing operating margins, showing a company is growing sales effectively. PJT's operating margin has grown by more than 10% in the last year. At the same time, its free cash flow, a measure of the real cash produced, has increased greatly, growing by 93.23% year-over-year, giving important financial room.
- High Return on Equity: Maybe most notable is PJT's return on equity (ROE) of 77.9%. This number, which shows how well a company creates profits from shareholder money, is a central part of Navellier's plan and puts PJT with the top performers in its field.
These numbers are not separate; they build on each other. Steady earnings surprises create trust and often lead to higher revisions. Fast sales growth, when combined with growing margins, changes directly into solid earnings growth. This positive cycle of momentum is exactly what the "Little Book" plan is made to spot early.
Fundamental Condition and Valuation Setting
Beyond the specific filter rules, a wider view of PJT's fundamental picture supports the investment case. According to ChartMill's full fundamental analysis report, PJT gets a 6 out of 10 total. The report points out notable strengths in profitability and financial condition. The company's high returns on assets and invested capital add to its excellent ROE, while a balance sheet with no debt and a good Altman-Z score indicate a low chance of financial trouble.
The main area for thought is in valuation. With a P/E ratio near 29.7, the stock is not inexpensive and trades above many industry peers. However, the report states that this valuation matches the wider S&P 500 and could be supported by the company's high profitability and solid expected earnings growth of more than 18% each year. The low PEG ratio, which includes growth, implies the higher price may be acceptable for the growth rate available.
An Option for Growth-Oriented Portfolios
For investors using a plan like Navellier's, PJT Partners offers a notable example. It is a company now showing the solid, self-supporting momentum the method looks for: increasing analyst estimates, steady earnings beats, speeding revenue and profit growth, and excellent returns on capital. While the valuation requires notice, the basic financial engine seems sound and healthy.
It is key to recall that a filter result is a beginning for more study, not a final suggestion. The "Little Book" filter is made to spot companies with solid growth traits, and PJT's present numbers show it matches that description. Investors curious about seeing other companies that now pass this strict set of growth filters can view the live filter results here.
Disclaimer: This article is for information only and does not form financial advice, a support, or a suggestion to buy, sell, or hold any security. The "Little Book That Makes You Rich" plan is one of many investment methods, and past results of a filter technique are not a guide for future outcomes. Investors should do their own full research and think about their personal financial position and risk comfort before making any investment choices.
