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Is Louis Navellier’s Growth Investor really good?
How have Louis Navellier’s stock recommendations performed in the past?
Can you really achieve better-than-average investment returns by following his stock picks?
Are there any other better alternatives to Louis Navellier’s Growth Investor?
After trying out Louis Navellier’s Growth Investor newsletter, here’s my experience.
Louis Navellier’s Growth Investor Investment Strategy
So, who is Louis Navellier?
What is his investment strategy?
Louis Navellier is the editor of the Growth Investor Newsletter which is the cheapest-priced newsletter under him.
There are quite a few very expensive newsletters that he is also selling:
- Breakthrough Stocks: $1,999
- Accelerated Profits: $1,999
- Platinum Growth: $9,995
He also founded a company called “Navellier & Associates” to help manage investors’ money.
His investment strategy is mainly focused on growth stocks.
Here’s a list of fundamental factors that Louis Navellier uses to screen and evaluate stocks:
- Upward Earnings Revision
- Earnings Surprise
- Growth in sales
- Operating Margins
- Free Cash Flow
- Earnings Growth
- Earnings Momentum
- Return on Equity
During an online background search on him, I found out about this SEC lawsuit against him and his company.
The Securities Exchange Commission charged them in August 2017, alleging that they breached their fiduciary duties and defrauded their clients through the use of marketing materials that included false and misleading statements regarding the past performance of the firm’s Vireo AlphaSector investment strategies.
Apparently, the marketing-beating past performance of the AlphaSector investment strategies was fabricated.
Despite knowing this, they continued to sell their clients this investment strategy.
In the end, the judge ruled that they had to pay more than $30 million in monetary relief.
Louis Navellier’s Growth Investor Stock Picks & Performance
There are two portfolios where you can find Louis Navellier’s stock recommendations.
One is the high-growth investment portfolio and the other one is the elite dividend-payer portfolio.
Let’s first look at the stock picks inside the high-growth investment portfolio.
This high-growth investment portfolio is 60% conservative stocks, 30% moderately aggressive stocks, and 10% aggressive stocks.
For the aggressive stocks, there are currently four stock picks with an average return of -34.69% as of 25th Oct 2022.
All four stock picks are down at least 20%.
The stock pick with the maximum loss is Volkswagen AG which is down almost 50% since it was recommended in Aug 2021.
For the moderately aggressive stocks, there are currently 12 stock picks with an average return of 7.45% as of 25th Oct 2022.
This average return is being distorted by one of the stocks, Nvidia which was recommended in May 2019 and has been up by about 190%.
If we take away this stock, the average return of the remaining 11 stock picks would be about -9% as of 25th Oct 2022.
Out of these 12 stock picks, 7 of them are down with a maximum loss of -65.63% and minimum loss of -12.77%, and 5 of them are up.
For the conservative stocks, there are currently 26 stock picks with an average return of 4.05% as of 25th Oct 2022.
Out of 26 stocks, 16 of them are down with a maximum loss of -31.23% and minimum loss of -1.6%, and 10 of them are up.
Only two of the 10 stocks are up substantially (one is up 150% while the other one is up 86%), and both were recommended in 2019.
Most of Louis Navellier’s 2021 and 2022 stock picks are not doing well.
Recently, Louise Navellier recommended his subscribers cut loss on one of the 12 moderately aggressive stocks.
This stock Endava plc was recommended on 29th Oct 2021 with a buy price of around $158.
As you can see, Louis Navellier recommended this stock right at its historical peak.
About one year later, he issued a Sell alert on Endava to exit at an almost 50% loss.
Personally, I am amazed by his perfect timing to recommend buying the stock almost at its peak, and I am also quite put off by this short holding period.
First of all, this is investing, not trading.
If it took Louis Navellier less than one year to change his mind about a stock recommendation, then most likely he didn’t really research the stock properly or he is NOT looking for high-growth stocks with long-term potential.
Below is his reason for cutting the loss after the stock tanked 50%.
It seems like his reason for selling is the most recent quarter’s earnings grew quite fast but fell short of analysts’ expectations and the next quarter’s earnings growth is forecast to be slowing.
To me, this seems too short-term focused and purely based on other people’s (i.e. analysts’) forecasts.
I don’t see any meaningful insight or analysis from Louis Navellier himself.
Have the company’s fundamentals as well as its potential long-term growth drastically changed in less than a year in his opinion?
It’s NOT even discussed in his brief explanation.
To issue a “Sell” just because the year-on-year quarter earning growth is forecast to slow for the next quarter, I think it just does not make sense.
Below is the chart of Apple’s year-on-year quarterly growth as well as quarterly revenue.
As you can see, its YOY quarterly revenue growth is not forever increasing.
For some consecutive quarters, it’s even declined.
But, fundamentally, Apple is a very solid company with a wide moat and long-term growth potential.
If you had sold your APPLE stock just because quarterly growth has declined in the short term, then you would have missed out on the massive rise in its share price in the next few years.
Another stock pick that has suffered a 65% loss is ZIM Integrated Shipping as of 25th Oct 2022.
Louis Navellier recommended it on 25th Feb 2022 with a buy price of $70.
In less than 8 months, the stock has fallen by almost 72% from $85 to $24.
Below is the explanation given by Louis Navellier for recommending ZIM Integrated Shipping.
Again, I was expecting a better, in-depth, and insightful explanation, but it was just analysts’ revenue and earnings estimates regurgitated again.
I would very much like to see an analysis of the shipping industry, and its industry outlook as well as the competitors.
Also, what about the company’s competitive edge?
Why do you choose ZIM Integrated Shipping over its competitors?
But, there is none of such analysis.
Overall, I am not impressed at all by the stock picks as well as the monthly issues.
There are other stock analysis and research platforms that offer you much better stock ratings as well as in-depth analysis.
I personally use Seeking Alpha as one of my stock research platforms.
Seeking Alpha quant ratings and stock grades are much more robust and powerful than the simplified stock grade offered by Louis Navellier.
Louis Navellier’s Growth Investor Pricing
So, how much does Louis Navellier’s Growth Investor subscription cost?
And what do you actually get?
As a subscriber, here’s what you get the following:
- 12 monthly issues of Growth Investor with one monthly stock pick
- Growth Investor Model Portfolio
- Various Special Reports (e.g. The #1 Stock for the Driverless Car Revolution, The AI Revolution)
- 90-Day 100% Satisfaction Guarantee
There are three types of subscription plans:
- Basic Membership: $49/year
- Pro Membership: $79/year
- VIP Membership: $99/year
The difference lies in how many more special reports you want to get.
The more expensive the membership is, the more special reports you get.
These special reports mostly tease you with the next moonshot stocks or the hidden small-cap stocks that could soar in the future.
The thing about moonshot stocks is that there is a very high probability of you losing most if not all of your investments and an extremely low probability of actually making the “so-called” extraordinary returns.
In fact, the legendary fund manager Peter Lynch talked about moonshot stocks in this video.
He tried investing in these “moonshot stocks” and never made any money, and advised people not to invest in them because all these companies are unprofitable and had nothing but a very good story to sell to investors.
Generally, I don’t recommend people buy moonshot stocks.
If you really want to invest, then I think you should only invest a small amount of money that you can afford to lose.
I allocate a very small portion of my portfolio to invest in high-growth stocks that I have researched and analyzed myself and have a strong conviction about.
Motley Fool Stock Advisor: A Better Alternative
Motley Fool Stock Advisor is focused on giving stock recommendations that are high-quality companies with long-term growth potential, which suits my investment philosophy.
The reason why I subscribe to Stock Advisor is to get stock ideas as Motley Fool has a proven record of finding stocks with massive upside potential.
Personally, I don’t buy every single stock recommendation.
What I do is that if I find any interesting stock pick, I will do my own research again.
First of all, let’s take a look at their track record as of 9th March 2023.
Below is the performance comparison between Motley Fool Stock Advisor and S&P 500 between 2002 and 8th June 2023.
As of 8th June 2023, average Motley Fool Stock Advisor recommendations have returned over 459% since inception while S&P 500 has returned 124%.
In short, the Motley Fool Stock Advisor has outperformed the market 3 to 1.
That’s a HUGE difference in returns.
But, what about its individual stock picks?
This metric is important because you might not be buying every single stock recommendation made by Stock Advisor.
Below is a table that shows you the performance of individual stock picks over the years.
As of 28th April 2023, Motley Fool Stock Advisor has had 178 stock recommendations with 100%+returns.
Here are just some of their best-performing stock picks:
- Amazon: it’s up 19,806%*
- Netflix: it’s up 23,901%*
- Walt Disney: it’s up 632%*
- NVIDIA: it’s up 16,423%*
- Shopify: it is up 4,107%*
- United Health Group: it is up 2,338 %*
[*Returns as of 31st Dec 2021. Past performance is no guarantee of future results. Individual investment results may vary. All investing involves risk of loss.]
Will the Motley Fool Stock Advisor always be right about their stock recommendations?
No, because no one can be right about their stock picks 100% of the time.
Let me sidetrack a bit here.
If any stock picking service tells you that they have a close to 100% success rate on their stock picks and can guarantee you high investment returns, you should definitely stay away.
Even Warren Buffet has loss-making stocks in his portfolio, but he still achieves above-average returns because a few big gainers in the portfolio can make up for the under-performers.
What I like about the Motley Fool Stock Advisor is that they are very open and transparent about their bad investments.
As a member, I can see the performance of ALL its past and current stock recommendations (even for closed positions).
For some other stock-picking services that I’ve tried, they don’t publish the performance of all their past and current stock recommendations, so it’s not easy for you to find out their true track record.
For example, the year 2022 has not been good for high-growth stocks because of rising interest rates and high inflation.
So, you can see a lot of Motley Fool Stock Advisor’s stock recommendations are not doing very well.
The truth is that other stock-picking services are not doing well either because of the stock market crash.
Do I still think it’s worth subscribing to the Motley Fool Stock Advisor?
My answer is yes.
The stock market goes up and down all the time.
Every few years, there is a bear market.
According to Peter Lynch who is a legendary fund manager, far more money has been lost by investors trying to anticipate correction than lost in corrections themselves.
In fact, I think the bear market is the BEST time to start investing in the stock market.
During a bear market, it’s more likely to find great businesses selling at very cheap prices because people are just selling out of fear when the business is still fundamentally sound.
A market crash is a time when huge wealth transfers from irrational and emotional investors to patient and rational investors.
So, if you are thinking of getting into stock investing, I highly recommend the Motley Fool Stock Advisor because I think there are a lot of well-researched stock recommendations.
In terms of pricing, Motley Fool Stock Advisor is also much more affordable.
Usually, its annual subscription is $199.
Right now, there’s a special limited-time $79 offer* for new members for the first year when you click the link here to try it out for 30 days with a Membership-Fee-Back Guarantee. (*Billed annually. Introductory price for the first year for new members only. First-year bills at $79 and renews at $199)
So, for $79 a year- that’s just $1.52 a week – you can gain unlimited access to their library of expert stock recommendations which are carefully selected to help you grow your wealth.