Louis Navellier's The Little Book That Makes You Rich is built around eight fundamental rules for identifying superior growth stocks, focusing on analyst revisions, earnings surprises, accelerating sales and earnings, expanding margins, cash flow strength, and return on equity. Rather than chasing price action, the strategy rewards companies that are consistently proving their growth credentials through published financial results. DYCOM INDUSTRIES INC (NYSE:DY) fits that template across nearly every one of those dimensions, which is why it shows up as a candidate after running the methodology through a stock screener.
A disciplined growth checklist
The screen based on Navellier's eight rules imposes a strict set of fundamental filters. Dycom clears most of them with substantial headroom:
- Estimate revisions: The EPS estimate for the next quarter has been raised by 14.28% over the past three months, comfortably above the 4% threshold.
- Earnings surprises: Dycom has beaten analyst EPS estimates in all of the last four reports, with an average beat of 22.96%, far exceeding the 10% target.
- Sales growth: Revenue growth over the trailing twelve months is 29.76%, and the most recent quarter grew 56.11% year over year, both above the 20% requirement.
- Operating margin expansion: Operating margin has grown by 13.60% over the past year, well above the 2% minimum.
- Cash flow strength: Free cash flow growth over the past year is 393.79%, more than enough to satisfy the 15% filter.
- Earnings growth: EPS grew 59.64% on a trailing twelve-month basis and 111.48% in the latest quarter versus the same quarter last year, both above the 15% threshold.
- Earnings momentum: The current Q2Q EPS growth of 111.48% compares with a decline of 1.42% in the same quarter a year ago, showing clear acceleration.
- Return on equity: ROE sits at 16.43%, above the 10% minimum required by the screen.
Why these criteria matter for the strategy
Navellier's framework treats these signals as evidence that a company is building genuine upward momentum. Analyst revisions matter because estimates tend to be conservative; when they move higher, it often reflects improving visibility. Repeated earnings surprises force the broader market to adjust expectations, which can support further upside. Strong sales and EPS growth show the business is expanding, while margin expansion suggests that growth is coming with improving profitability.
Dycom provides contracting services for telecommunications and digital infrastructure providers, including engineering, construction, maintenance, and fulfillment work. That puts the company in the path of spending on fiber deployment, 5G buildouts, and data center-related electrical construction. The recent growth metrics are consistent with that backdrop, and the screen is designed to catch companies at this stage of acceleration.
What the fundamental rating shows
The high-level fundamental assessment gives Dycom a score of 6 out of 10. The strongest component is growth, which earns an 8, reflecting both strong past EPS expansion and solid forward expectations. Profitability scores 7, supported by operating margins, profit margins, and return on equity that rank in the upper half of the Construction & Engineering industry. Valuation scores 6; the trailing P/E of 30.59 is expensive in absolute terms, but the stock is cheaper than roughly 65% of its industry peers and trades at a forward P/E of 19.94. Expected EPS growth of 30.75% in the coming years also helps justify the multiple.
Investors who want to review the full fundamental breakdown can use this detailed fundamental analysis page.
Risks and limitations
The screen is not without caveats. Dycom's financial health score is softer than its growth and profitability scores. Debt to equity stands at 1.48, and debt to free cash flow is 6.40, indicating meaningful reliance on borrowed capital. The company also pays no dividend, which may disappoint income-focused investors. Liquidity is strong, with a current ratio of 2.58 and a quick ratio of 2.46, and the Altman-Z score of 3.71 suggests no immediate bankruptcy risk. Still, a slowdown in telecom or utility capital spending could pressure the growth metrics that currently make the stock attractive.
Other screens back the same growth thesis
Dycom also appears in other screens built around growth and quality. The Fastest Growing Stocks screen includes DY for strong recent growth in both earnings and sales, while the High EPS Growth Stocks screen reinforces the earnings momentum story. Together, these screens confirm the fundamental-growth case for the stock.
Where to find more Little Book candidates
The same methodology can be applied across the broader market, and it is designed to be a starting point rather than a final verdict. Investors looking for other stocks that pass Navellier's eight rules can run the screen themselves. This screen shows the current list of companies matching the strategy's fundamental criteria.
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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Dycom Industries (NYSE:DY) Rides High Growth and Fundamental Strength
Louis Navellier's The Little Book That Makes You Rich is built around eight fundamental rules for identifying superior growth stocks, focusing on analyst revisions, earnings surprises, accelerating sales and earnings, expanding margins, cash flow strength, and return on equity. Rather than chasing price action, the strategy rewards companies that are consistently proving their growth credentials through published financial results. DYCOM INDUSTRIES INC (NYSE:DY) fits that template across nearly every one of those dimensions, which is why it shows up as a candidate after running the methodology through a stock screener.
A disciplined growth checklist
The screen based on Navellier's eight rules imposes a strict set of fundamental filters. Dycom clears most of them with substantial headroom:
Why these criteria matter for the strategy
Navellier's framework treats these signals as evidence that a company is building genuine upward momentum. Analyst revisions matter because estimates tend to be conservative; when they move higher, it often reflects improving visibility. Repeated earnings surprises force the broader market to adjust expectations, which can support further upside. Strong sales and EPS growth show the business is expanding, while margin expansion suggests that growth is coming with improving profitability.
Dycom provides contracting services for telecommunications and digital infrastructure providers, including engineering, construction, maintenance, and fulfillment work. That puts the company in the path of spending on fiber deployment, 5G buildouts, and data center-related electrical construction. The recent growth metrics are consistent with that backdrop, and the screen is designed to catch companies at this stage of acceleration.
What the fundamental rating shows
The high-level fundamental assessment gives Dycom a score of 6 out of 10. The strongest component is growth, which earns an 8, reflecting both strong past EPS expansion and solid forward expectations. Profitability scores 7, supported by operating margins, profit margins, and return on equity that rank in the upper half of the Construction & Engineering industry. Valuation scores 6; the trailing P/E of 30.59 is expensive in absolute terms, but the stock is cheaper than roughly 65% of its industry peers and trades at a forward P/E of 19.94. Expected EPS growth of 30.75% in the coming years also helps justify the multiple.
Investors who want to review the full fundamental breakdown can use this detailed fundamental analysis page.
Risks and limitations
The screen is not without caveats. Dycom's financial health score is softer than its growth and profitability scores. Debt to equity stands at 1.48, and debt to free cash flow is 6.40, indicating meaningful reliance on borrowed capital. The company also pays no dividend, which may disappoint income-focused investors. Liquidity is strong, with a current ratio of 2.58 and a quick ratio of 2.46, and the Altman-Z score of 3.71 suggests no immediate bankruptcy risk. Still, a slowdown in telecom or utility capital spending could pressure the growth metrics that currently make the stock attractive.
Other screens back the same growth thesis
Dycom also appears in other screens built around growth and quality. The Fastest Growing Stocks screen includes DY for strong recent growth in both earnings and sales, while the High EPS Growth Stocks screen reinforces the earnings momentum story. Together, these screens confirm the fundamental-growth case for the stock.
Where to find more Little Book candidates
The same methodology can be applied across the broader market, and it is designed to be a starting point rather than a final verdict. Investors looking for other stocks that pass Navellier's eight rules can run the screen themselves. This screen shows the current list of companies matching the strategy's fundamental criteria.
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 »