O’Hara points out that dividends can be adjusted, earnings can be moved around by taking writeoffs and doing fancy accounting. “There’s nothing I can do to adjust top-line sales or revenue numbers. It’s a more consistent number to look at.”
Another reason the provider has gone with revenues is because all companies have a revenue.
Garaventa says the index caps any single weighting at 7%. Even a giant like Wal-Mart, which has strong sales, will never be weighted at more than 7%.
The hope is that if the RevenueShares fund takes off, it will demonstrate what Navellier is capable of. “We’re looking for companies that have solid fundamentals – sales growth, earnings growth. And people are buying these stocks based on those reasons,” he says.
“We hope it’s a great success.”