The "Little Book That Makes You Rich" strategy, as outlined by renowned growth investor Louis Navellier, seeks to identify companies exhibiting a potent combination of strong and accelerating growth, increasing profitability, positive analyst sentiment, and solid financial health. The approach is rooted in the belief that stocks displaying these fundamental characteristics are more likely to sustain upward price momentum. The strategy screens for eight specific criteria, ranging from earnings revisions and surprises to cash flow strength and return on equity. Neurocrine Biosciences Inc (NASDAQ:NBIX) has emerged from this screen as a potential candidate, and its recent financial data suggests it aligns closely with the methodology’s core principles.
When it comes to earnings quality—a cornerstone of the Little Book strategy—NBIX delivers convincing numbers. The company has beaten analyst EPS estimates in three of the last four quarters, with an average beat of 18.12%, far exceeding the screen’s 10% threshold. This consistent ability to outperform expectations forces analysts to revise their models upward, which is precisely what has happened: the estimate for the next quarter’s EPS has been raised by 10.57% over the past three months (the screen requires 4%). These upward revisions are a key signal for the strategy, as they often foreshadow future price increases.
Beyond earnings surprises, the Little Book methodology demands strong and accelerating growth. Here, NBIX shines across the board. The company’s trailing twelve-month EPS growth stands at an impressive 120%, while its quarter-over-quarter EPS growth hit a staggering 2,287.5%. Revenue is also increasing at a fast pace, with year-over-year (TTM) growth of 28.59% and a quarterly growth rate of 42.25%. More importantly, the earnings momentum check—comparing the current quarter’s EPS growth rate to the one from a year ago—shows a positive acceleration, fulfilling the strategy’s requirement for rising momentum. This combination of high growth and acceleration forms the engine of the Little Book’s growth investing thesis.
Profitability and efficiency are equally critical. The screen demands an expanding operating margin, and NBIX delivers with a 23.89% increase in its operating margin over the past year. Cash flow generation is another key factor, and the company’s free cash flow has grown by 35.30% year-over-year, well above the required 15%. Finally, a high return on equity (ROE) of 19.62% not only meets the screen’s 10% minimum but also indicates that management is effectively deploying shareholder capital. These metrics suggest the company is not just growing, but doing so profitably and sustainably.
Taking a high-level view, the full fundamental analysis report for NBIX (available at this link) gives the stock an overall rating of 7 out of 10. This score is supported by excellent profitability (8/10) and financial health (7/10) ratings. Perhaps most notably, the growth rating is a near-perfect 9/10, and the valuation score is a solid 7/10, reflecting a rare combination of strong expansion and reasonable pricing.
While the analysis above highlights NBIX as a strong candidate, it represents just one result from a broader screening process. Investors looking to explore additional opportunities that meet the Little Book’s strict criteria can access the full live screen and customize the parameters to their own preferences via this link: View the full Little Book screen results
Disclaimer: This article is for informational and educational purposes only and does not constitute investment advice. All investments carry risk, and past performance is not a guarantee of future results. Always conduct your own research or consult with a qualified financial professional before making any investment decisions.
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Neurocrine Biosciences Inc (NASDAQ:NBIX) Shines in the "Little Book That Makes You Rich" Screen
The "Little Book That Makes You Rich" strategy, as outlined by renowned growth investor Louis Navellier, seeks to identify companies exhibiting a potent combination of strong and accelerating growth, increasing profitability, positive analyst sentiment, and solid financial health. The approach is rooted in the belief that stocks displaying these fundamental characteristics are more likely to sustain upward price momentum. The strategy screens for eight specific criteria, ranging from earnings revisions and surprises to cash flow strength and return on equity. Neurocrine Biosciences Inc (NASDAQ:NBIX) has emerged from this screen as a potential candidate, and its recent financial data suggests it aligns closely with the methodology’s core principles.
When it comes to earnings quality—a cornerstone of the Little Book strategy—NBIX delivers convincing numbers. The company has beaten analyst EPS estimates in three of the last four quarters, with an average beat of 18.12%, far exceeding the screen’s 10% threshold. This consistent ability to outperform expectations forces analysts to revise their models upward, which is precisely what has happened: the estimate for the next quarter’s EPS has been raised by 10.57% over the past three months (the screen requires 4%). These upward revisions are a key signal for the strategy, as they often foreshadow future price increases.
Beyond earnings surprises, the Little Book methodology demands strong and accelerating growth. Here, NBIX shines across the board. The company’s trailing twelve-month EPS growth stands at an impressive 120%, while its quarter-over-quarter EPS growth hit a staggering 2,287.5%. Revenue is also increasing at a fast pace, with year-over-year (TTM) growth of 28.59% and a quarterly growth rate of 42.25%. More importantly, the earnings momentum check—comparing the current quarter’s EPS growth rate to the one from a year ago—shows a positive acceleration, fulfilling the strategy’s requirement for rising momentum. This combination of high growth and acceleration forms the engine of the Little Book’s growth investing thesis.
Profitability and efficiency are equally critical. The screen demands an expanding operating margin, and NBIX delivers with a 23.89% increase in its operating margin over the past year. Cash flow generation is another key factor, and the company’s free cash flow has grown by 35.30% year-over-year, well above the required 15%. Finally, a high return on equity (ROE) of 19.62% not only meets the screen’s 10% minimum but also indicates that management is effectively deploying shareholder capital. These metrics suggest the company is not just growing, but doing so profitably and sustainably.
Taking a high-level view, the full fundamental analysis report for NBIX (available at this link) gives the stock an overall rating of 7 out of 10. This score is supported by excellent profitability (8/10) and financial health (7/10) ratings. Perhaps most notably, the growth rating is a near-perfect 9/10, and the valuation score is a solid 7/10, reflecting a rare combination of strong expansion and reasonable pricing.
While the analysis above highlights NBIX as a strong candidate, it represents just one result from a broader screening process. Investors looking to explore additional opportunities that meet the Little Book’s strict criteria can access the full live screen and customize the parameters to their own preferences via this link: View the full Little Book screen results
Disclaimer: This article is for informational and educational purposes only and does not constitute investment advice. All investments carry risk, and past performance is not a guarantee of future results. Always conduct your own research or consult with a qualified financial professional before making any investment decisions.
Read full article here »