Navellier’s “Christmas in October”

By Travis Johnson, Stock Gumshoe, October 29, 2007

I think we’ve all probably seen Louis Navellier out there in front of every camera or microphone available recently, thanks to the fact that he’s got a new book out, the Little Book that Makes You Rich, from the same Little Book series that brought us my favorite short investing tome, The Little Book that Beats the Market by Joel Greenblatt.

So anyway, we’re seeing a lot of Navellier lately, and as part of his book push he has recently made at least part of his quantitative database, formerly subscriber-only, into a free resource (though be prepared to get plenty more “marketing emails” from him if you sign up — I know not everyone loves the stuff as much as I do). That doesn’t tell us what his newsletter picks are, but it does give some idea of how his very quantitative approach works, and the kinds of things that are important to him.

And, for our purposes, he’s still sending out what must be the most effective newsletter marketing emails you can write: the “company name withheld” teaser that keeps Stock Gumshoe in Kit Kats and comic books.

His latest one: a push for Gigamedia first, which we identified as Navellier’s favorite China play a month or two ago. But he just up and names that one, so we’ve got to sleuth out his other newbies.

First, the company behind the click wheel and other touchpad-based technologies, which suffered in the wake of Apple’s decision to use other companies for their ipod interface parts. He says this company still churns out millions of scroll wheels at its factory in Santa Clara, which means that he must be teasing us with …

Synaptics (SYNA)

This one’s a little rich for my blood, as might be expected for the pick of a noted growth guy like Navellier, but I haven’t looked in detail at their future prospects. They do have a lot of cool sounding new technologies, including much more advanced scrolling surfaces, including some with variable lighting and other complicated sounding stuff. I expect they’re competing with current touch-screen technology to some extent, including both the iPhone style reactive glass and the Palm-style touchscreens … but I certainly don’t know what the future is in this area, just that Navellier thinks this one has the momentum of a winner.

And the other company we hear about in this email is releasing earnings in a few weeks — they’re a diagnostics company, and I’m certainly in agreement with Navellier when he says that diagnostics companies have been on a wild tear of late. Makes it look like the Medical Investor folks were ahead of the curve in pushing their “SNiP Technique” companies earlier this year.

They are located in Cincinnati, and their big product, or at least the one Navellier likes, is for food poisoning — he notes that it’s important to fight this because the symptoms of a deadly food poisoning case can masquerade as something much less serious.

So what do we have here? A few moments on Thrombulate in the Thinkolator and I can tell you that this small cap diagnostics company that Navellier “hesitates to share with you” because of its small float is …

Meridian Bioscience (VIVO)

Good ticker. Though I was surprised to see that is not at all what I was looking for (don’t go there if you’re at work — it’s some kind of Playboy TV service).

Meridian does have a useful-sounding fast test for e-coli, which I suppose is what Navellier is referring to with his food poisoning bit — I’d like to have one of those handy after eating a suspicious hamburger, to be sure. That’s not necessarily the full focus of the company, however, they’re quite small (just over a billion in market cap) but also offer what looks, on the surface at least, like a pretty broad array of products in the diagnostic arena.

They trade at a fairly similar PE to Synaptics, but this company sounds more appealing to me — analysts are not projecting massive growth with a forward PE of 44, but they have consistently surprised on the upside and shown some nice increases in sales and earnings with very solid margins. There has been quite a bit of insider selling over the last few months, which I’m not crazy about, but I don’t know the full story and it’s certainly true that insiders can sell for lots of reasons that don’t matter to other investors.

So, two pretty expensive picks from Navellier, to go along with his thesis that we’re at the cusp of more fantastic growth — certainly that’s what I like to hear, but I am not quite as confident as he is that it’s true. VIVO sounds like it’s worth another look to me, but I’m going to let others think about SYNA (feel free to let me know if you think I’m wrong).

Welcome to a new week … sounds like all the pundits are convinced that it’s certain to be a crazy one, so hold on to your hats.

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Dari Justice
Dari Justice
October 30, 2007 6:06 pm

Can you please tell me where to find the list of “70 government-approved tax free businesses”

Steven sjuggarrd (sp??)
refers to them in a report and I casnnot figure out where to find them.
Thanks sooo much!

October 30, 2007 8:55 pm