RIGEL PHARMACEUTICALS INC (NASDAQ:RIGL) Aligns Perfectly with Louis Navellier’s Growth Investing Strategy

Louis Navellier’s The Little Book That Makes You Rich presents a growth investing strategy centered on finding stocks with solid earnings momentum, rising sales, and better profitability. The method uses eight main rules, each meant to identify companies showing strong financial performance and higher analyst expectations. By applying these filters, investors seek stocks likely to see notable price gains.

RIGEL PHARMACEUTICALS INC (NASDAQ:RIGL) stands out as a stock that fits well with Navellier’s approach. Here, we look at how RIGL matches several of the book’s important screening points.

Key Points from Navellier’s Strategy and RIGL’s Alignment

1. Higher Earnings Revisions
   A key part of Navellier’s strategy is rising earnings estimates, which point to better business prospects. RIGL’s next-quarter EPS estimate has moved 1,211.84% higher in the last three months, a sharp upward change showing strong analyst trust.

2. Consistent Earnings Beats
   Firms that regularly exceed expectations often see more upward revisions. RIGL has posted four straight positive EPS surprises, with an average beat of 454.19%, well above the screener’s 10% mark.

3. Growing Sales
   Rising revenue is vital for growth stocks. RIGL’s year-over-year sales growth is 68.74%, while quarterly revenue jumped 80.58% compared to the same period last year. These numbers easily clear the 20% minimum growth needed.

4. Better Operating Margin
   Improving profitability shows efficient scaling. RIGL’s operating margin has increased 276.62% over the past year, far above the 2% benchmark, indicating the firm is turning higher sales into stronger profits.

5. Solid Cash Flow
   Free cash flow supports reinvestment and lowers reliance on outside funding. RIGL’s FCF growth of 152.41% over the past year shows its ability to produce cash from operations.

6. Earnings Expansion
   RIGL’s trailing twelve-month EPS growth of 272.50% and quarterly EPS growth of 226.00% reflect strong bottom-line gains, surpassing the 15% thresholds for both measures.

7. Earnings Momentum
   Faster earnings growth sets a stock apart. RIGL’s latest quarterly EPS growth (226.00%) is much higher than its growth from the same quarter a year ago (37.50%), meeting the momentum standard.

8. High Return on Equity (ROE)
   ROE tracks how well a company generates profits from shareholder equity. RIGL’s ROE of 200.24% is outstanding, putting it near the top of its industry.

Fundamental Summary

RIGL’s fundamental analysis report shows a mixed but encouraging picture:

• Profitability: Strong margins (operating margin of 21.63%) and top-tier ROE.
• Valuation: Priced lower than peers, with a P/E ratio of 10.95, cheaper than 96% of biotech stocks.
• Growth: Outstanding past EPS and revenue growth, though future estimates hint at slower progress.
• Financial Health: High debt-to-equity (2.42) raises concerns, but steady free cash flow helps offset risk.

Why Growth Investors Should Take Note

Navellier’s method highlights stocks with improving fundamentals, as these often lead to market gains. RIGL’s sharp earnings revisions, margin growth, and cash flow gains match traits seen in successful growth stocks. While its debt levels need watching, the stock’s valuation leaves room for upside if performance holds.

For investors looking for similar opportunities, the full screen results based on Navellier’s rules can be reviewed further.

Disclaimer: This analysis is not investment advice. Do your own research or consult a financial advisor before making investment decisions.