Louis Navellier's The Little Book That Makes You Rich is built around a straightforward growth premise: buy companies with rising analyst expectations, positive earnings surprises, accelerating sales and earnings, expanding margins, strong cash flow, and high returns on equity. SANMINA CORP (NASDAQ:SANM) is a San Jose, California-based electronics manufacturing services company that currently clears most of those hurdles, and its latest fundamental data shows why it fits the methodology.
The Eight Rules Behind the Screen
Navellier's approach identifies superior growth stocks by applying eight fundamental rules. The ChartMill screen based on the book translates those rules into specific thresholds for earnings revisions, earnings surprises, revenue growth, operating margin expansion, free cash flow growth, EPS growth, earnings momentum, and return on equity.
Many of the metrics are designed to capture acceleration rather than just strong absolute numbers. The logic is that a company beating estimates and raising guidance is likely to keep forcing analysts upward, which often supports further price appreciation.
How Sanmina Measures Up
Sanmina's recent results stand out on nearly every screen criterion:
- Positive earnings revisions: The consensus EPS estimate for the next quarter has been revised upward by 13.13% in the last three months, comfortably above the 4% threshold.
- Positive earnings surprises: Sanmina beat EPS estimates in all four of the last reported quarters, with an average beat of 15.0% versus the 10% requirement.
- Increasing sales growth: Revenue grew 69.67% in the latest quarter compared with the same quarter last year, while trailing twelve-month revenue is up 58.56%, both well above the 20% minimums.
- Expanding operating margin: Operating margin improved by 16.74% over the past year, far exceeding the 2% filter.
- Strong cash flow: Free cash flow growth over the past year came in at 147.1%, more than nine times the 15% screen threshold.
- Earnings growth: EPS rose 116.34% in the latest quarter versus the year-ago quarter, and EPS for the trailing twelve months is up 81.07%, both well above the 15% requirements.
- Positive earnings momentum: The most recent quarterly EPS growth of 116.34% compares with 22.4% four quarters ago, showing clear acceleration.
- High return on equity: ROE stands at 12.04%, above the 10% minimum.
These are not arbitrary hurdles. The strategy relies on the idea that upward estimate revisions and repeated earnings beats signal that analysts are still behind the curve. Sanmina's accelerating revenue and EPS growth, combined with expanding margins and substantial free cash flow generation, fit that pattern.
Fundamental Profile
The ChartMill fundamental report assigns Sanmina a rating of 6 out of 10. Profitability and financial health receive neutral evaluations, but the report highlights strong growth and attractive valuation metrics, noting that the combination can appeal to both growth and value investors.
The growth picture is particularly compelling. EPS is expected to grow at 34.70% annually over the coming years, while revenue is projected to grow at 30.14%. Valuation also looks reasonable relative to the broader market, with a forward P/E of 15.32 versus the S&P 500's forward multiple of 21.76.
For a full breakdown of the fundamental rating, including profitability, margins, solvency, and valuation details, see Sanmina's fundamental analysis report.
Risks to Consider
The Little Book screen is intentionally focused on short-term fundamental momentum, which means the strategy works best when estimates keep moving higher. If analyst revisions reverse or growth decelerates, the stock could lose some of its appeal. Sanmina also pays no dividend, so the investment case relies on earnings growth and multiple expansion rather than income.
Confirmation From Other ChartMill Screens
Sanmina's growth profile is also visible on other ChartMill screens that use different selection methods.
Together, these independent screens reinforce the strength of the fundamental setup.
Finding More Candidates
Investors who want to apply this methodology more broadly can review the latest stocks that pass the same eight fundamental tests by checking out the Little Book screen at ChartMill.
Disclaimer: This article is for informational and educational purposes only and does not constitute financial advice or a recommendation to buy or sell any security. Always conduct your own research and consider your risk tolerance before making investment decisions.
Read full article here »
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Sanmina (NASDAQ:SANM) Shows Accelerating Growth and Improving Fundamentals Across Key Metrics
Louis Navellier's The Little Book That Makes You Rich is built around a straightforward growth premise: buy companies with rising analyst expectations, positive earnings surprises, accelerating sales and earnings, expanding margins, strong cash flow, and high returns on equity. SANMINA CORP (NASDAQ:SANM) is a San Jose, California-based electronics manufacturing services company that currently clears most of those hurdles, and its latest fundamental data shows why it fits the methodology.
The Eight Rules Behind the Screen
Navellier's approach identifies superior growth stocks by applying eight fundamental rules. The ChartMill screen based on the book translates those rules into specific thresholds for earnings revisions, earnings surprises, revenue growth, operating margin expansion, free cash flow growth, EPS growth, earnings momentum, and return on equity.
Many of the metrics are designed to capture acceleration rather than just strong absolute numbers. The logic is that a company beating estimates and raising guidance is likely to keep forcing analysts upward, which often supports further price appreciation.
How Sanmina Measures Up
Sanmina's recent results stand out on nearly every screen criterion:
These are not arbitrary hurdles. The strategy relies on the idea that upward estimate revisions and repeated earnings beats signal that analysts are still behind the curve. Sanmina's accelerating revenue and EPS growth, combined with expanding margins and substantial free cash flow generation, fit that pattern.
Fundamental Profile
The ChartMill fundamental report assigns Sanmina a rating of 6 out of 10. Profitability and financial health receive neutral evaluations, but the report highlights strong growth and attractive valuation metrics, noting that the combination can appeal to both growth and value investors.
The growth picture is particularly compelling. EPS is expected to grow at 34.70% annually over the coming years, while revenue is projected to grow at 30.14%. Valuation also looks reasonable relative to the broader market, with a forward P/E of 15.32 versus the S&P 500's forward multiple of 21.76.
For a full breakdown of the fundamental rating, including profitability, margins, solvency, and valuation details, see Sanmina's fundamental analysis report.
Risks to Consider
The Little Book screen is intentionally focused on short-term fundamental momentum, which means the strategy works best when estimates keep moving higher. If analyst revisions reverse or growth decelerates, the stock could lose some of its appeal. Sanmina also pays no dividend, so the investment case relies on earnings growth and multiple expansion rather than income.
Confirmation From Other ChartMill Screens
Sanmina's growth profile is also visible on other ChartMill screens that use different selection methods.
Together, these independent screens reinforce the strength of the fundamental setup.
Finding More Candidates
Investors who want to apply this methodology more broadly can review the latest stocks that pass the same eight fundamental tests by checking out the Little Book screen at ChartMill.
Disclaimer: This article is for informational and educational purposes only and does not constitute financial advice or a recommendation to buy or sell any security. Always conduct your own research and consider your risk tolerance before making investment decisions.
Read full article here »