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So, what are Louis Navellier’s stock picks?
How exactly does he pick his stocks?
How has his stock picks performed in the past?
Louis Navellier High Growth Stock Picks
After trying out Louis Navellier’s Growth Investor newsletter, it seems to me that he makes his recommendation purely based on his stock grades.
Louis Navellier developed his own rating system to assess if a stock is worth investing in.
A total grade” of “A, B, C, D, or F” is given to every stock:
- Total Grade “A”: Strong Buy
- Total Grade “B”: Buy
- Total Grade “C”: Hold
- Total Grade “D”: Sell
- Total Grade “F”: Strong Sell
The Total Grade is calculated from a blend of the Quantitative Grade and the Fundamental Grade.
The Fundamental Grade is calculated from a weighted blend of eight fundamental variables:
- Operating Margin Growth
- Sales Growth, Earnings Growth
- Earnings Momentum
- Earnings Surprises
- Analyst Earnings Revisions
- Cash Flow
- Return on Equity
The Quantitative Grade is a proprietary quantitative measure that indicates the current level of buying pressure from institutional investors.
All the grades are updated every Monday morning instead of daily.
Personally, I think Louis Navellier’s stock rating system is not as robust and advanced as Seeking Alpha’s Quant Rating system.
His fundamental grade and quantitative grade are narrowly focused on the factors “growth” and “momentum”, ignoring all the other important factors such as “Value” and “Profitability”.
Also, Louis Navellier only uses 7 metrics to measure “Growth” and “Momentum”.
On the other hand, Seeking Alpha uses almost 100 relevant metrics (including the 7 metrics used by Louis Navellier) to evaluate “Growth”, “Momentum”, “Valuation”, “Profitability” and “Earnings Revisions”.
Let’s take a look at one of Louis Navellier’s most recent stock picks.
In March 2022, he recommended Tyson Foods when the stock’s total grade becomes “A”.
7 Months later, he issued a “SELL” alert and asked his subscribers to sell Tyson Foods at a loss of -28% when the total grade becomes “F”.
Below is the share price chart of Tyson Foods.
As you can see, Louis Navellier recommended this stock right around its peak at $93.37, and then the stock just kept going down. He just recommended its subscribers cut their losses at $62.
Would you have avoided this huge loss by following Seeking Alpha’s Quant Ratings?
Below are Seeking Alpha’s Quant Ratings on Tyson Foods for the past year.
As you can see, there is no “Strong Buy” or even “Buy” ratings issued on Tyson Food at all.
You would have avoided this losing stock recommendation if you used Seeking Alpha.
Another drawback of using Louis Navellier’s high-growth stock-picking system is that his stock rating could get you to buy a high-growth stock at an extremely over-valued price and later on suffer a big loss.
Overpaying for a stock is a bad way to invest.
One of Louis Navellier’s stock picks is Endava PLC.
Again, he recommended this high-growth stock right around its historical peak at $158.46 in Oct 2021.
One year and a 50% drop in share price later, he is recommending his subscribers cut their losses at around $78.
I am starting to feel that he is NOT recommending stocks for investments, but short-term trading.
And it is not good trading.
I also thought that high-growth stock investing is all about finding good companies with long-term growth potential, just like how Motley Fool Rule Breakers many years ago recommended Amazon and Netflix as good high-growth stocks to hold for the long term.
Now, let’s see if you would have avoided this losing stock pick by using Seeking Alpha.
Below is Seeking Alpha’s Quant Rating on Endava PLC.
According to Seeking Alpha, Endava was a “Strong Buy” in Jan 2020.
After that, it was only briefly a “Strong Buy” around July 2021.
For the year 2022, it was never a “Strong Buy”.
So, if you had followed the rule of buying the stock when it first becomes a “Strong Buy” and selling the stock right after it is no longer a “Strong Buy”, you would have avoided the massive drop in Endava’s share price.
Louis Navellier High-Growth Stock Picks Performance
Let’s first look at the high-growth 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.
So, the majority of Louis Navellier’s stock picks in 2021 and 2022 are not doing well with a few of them down by almost 50%.
Of course, there are also a few stock picks that did well.
For example, he recommended 3 oil & gas stocks around Feb and March 2022, and they are up by an average of 23% as of 27th Oct 2022.
However, whether these oil & gas stocks will do well in the next few years remains to be seen.
Louis Navellier Dividend Stock Picks
Now, let’s take a look at the dividend stock picks in his “Elite Dividend Portfolio”.
Louis Navellier’s “Elite Dividend Portfolio” is 60% conservative stocks, 30% moderately aggressive stocks, and 10% aggressive stocks.
For conservative stocks, there are currently 23 stock picks with an average return of 2.6% as of 27th Oct 2022.
Out of these 23 stock picks, only 4 stocks were recommended in 2022.
These four stocks include one railroad stock (down -28.39%), one industrial REIT (down -31.49%), one steel stock (down -2.08%), and another one steel stock (up +13%).
Eight stocks were recommended in 2021.
Out of these eight stocks, one is down -49%, five are down more than -20% and the remaining two are about flat.
As you can see, most of Louis Navellier’s conservative dividend stock picks in 2021 and 2022 had terrible returns.
For moderately aggressive stocks, there are currently 12 stocks with an average return of 12.81% as of 27th Oct 2022.
9 out of these 12 stocks were recommended in 2022 with a maximum gain of 39% and a maximum loss of -46%.
|Louis Navellier’s Stock Pick 2022||Return as of Oct 2022|
|Marine shipping stock||-46.12%|
|Thermal Coal stock||-7.38%|
|Oil & Gas stock||18%|
|Oil & Gas stock||3.4%|
|Oil & Gas stock||23%|
|Oil & Gas stock||22%|
|Oil & Gas stock||39%|
|Oil & Gas stock||0.16%|
For the aggressive stocks, there are currently four stock picks with an average return of -2.77% as of 27th Oct 2022.
Out of these four stocks, two were recommended in 2021 and two in 2022.
|Louis Navellier’s Stock Pick||Return as of Oct 2022|
|Marine shipping stock||-24.7%|
|Marine shipping stock||5.7%|
|Oil & Gas stock||-14.7%|
Overall, I don’t find his dividend stock picks very impressive.
For dividend stocks, I prefer high-quality defensive dividend stocks with consistent dividend payouts and less risk, but I noticed that some of his dividend stock picks fell up to 50%. That’s too volatile for dividend stock investing.
If you want to invest in dividend stocks, I highly recommend Seeking Alpha Premium to help you analyze and research dividend stocks.
Seeking Alpha helps you evaluate dividend stocks by looking at the following:
- Dividend Safety
- Dividend Growth
- Dividend Consistency
- Dividend Yield
For each of the above, a “Grade” is assigned to indicate the strength (or weakness) of the dividend stock after analyzing and comparing relevant metrics among stocks in the same sector.
“Grade A+” is the best while “Grade F” is the worst.
Now, let’s dive in and look at how Dividend Safety Grade is being derived and whether it can be trusted.
After having backtested more than 4,000 financial metrics (including 600 newly acquired metrics from S&P Global), Seeking Alpha has narrowed them down to 27 individual metrics (as shown below) to calculate the Dividend Safety Grade.
For example, metrics for profitability, debt, analyst dividend estimates and revisions, and momentum are all being taken into account.
How has Seeking Alpha Dividend Safety grade performed so far?
Based on back-tested results, if you stick to stocks with Seeking Alpha Dividend Safety Grade of A+ to A-, you would have avoided 99% of dividend cuts since 2010.
Also, 98% of dividend cuts would have been averted with stocks possessing a Dividend Safety Grade of A+ through B-.
This result is really very impressive.
How has Seeking Alpha’s Dividend Growth Grade performed so far?
According to its Quant Team’s backtest, from 2010-2021, stocks with Dividend Growth grades of A+ delivered a total return of 496% while the Vanguard Dividend Appreciation ETF (VIG) only returned 334%.
So, how much does it cost?
Seeking Alpha Premium is priced at only $239 per year or $19.90 per month.
What is more, for a limited time only, new subscribers can get 50% off the first year of their subscription.
So, it is just $119 per year, which is just $9.9 per month.
On top of that, there is absolutely zero risk in trying out Seeking Alpha Premium for 14 days to see if it’s a good fit for you.