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JohnCLeven (83.60)

I'd like to share a couple Price/Graham Number screens with you

Recs

6

February 27, 2013 – Comments (7)

Hey fools!

Just ran a modified Price/Graham Number screen. I took data from the Google stock screener, sorted for the following: mkt cap>1B, 5 yr avg ROE>20%, and Div yield>2%. Then I just copied the info into excel and calculated price to graham numbers for them all, and sorted lowest to highest.

Those results can be found here:

https://docs.google.com/spreadsheet/ccc?key=0AiCyYoc2ERYzdDZucWdJekVVTm5seVBvUUtJMWJ0S1E&usp=sharing

Then I ran a very similar 2nd screen. The differences being: 1) I removed the >2% dividend requirement, and 2) I relaxed the 5 yr avg ROE to 15% from the original 20%. That 2nd screen can be found below:

https://docs.google.com/spreadsheet/ccc?key=0AiCyYoc2ERYzdGJ4SVJMcE5aV2JGRjBLU2xHX3g0bnc&usp=sharing

Here are some notable names by P/Graham, sorted low to high.

RDS.A - 0.62x

GLW – 0.65x

TOT – 0.68x

AFL – 0.73x

CVX – 0.80x

DFS – 0.87x

LXK – 0.88x

UNH – 0.89x

FLO - 0.90x

ABT – 0.91x

KSS – 0.93x

INTC – 0.94x

AZN – 0.98x

RTN – 0.99x

JOY – 1.01x

JOSB – 1.02x

CSCO – 1.07x

HRS – 1.09x

F – 1.12x

NSC - 1.19x

CSX – 1.19x

AAPL – 1.26x

And here are 6 of the highest notables:

NFLX 19.72x

LULU – 5.50x

CL – 4.94x

HSY – 4.72x

SAM 4.09x

PCLN – 3.96x

Hope you found the info worthwhile!

Let me know if you have questions or comments.

Thanks,

-John 

7 Comments – Post Your Own

#1) On February 27, 2013 at 9:35 PM, JohnCLeven (83.60) wrote:

Also, this info is only as accurate as the google stock screener.

And, obviously, screens are a starting point of real research and no substitute for actual due dilligence.

Lastly, I just used regular book value per share, per google finance, not tangible BV.

I'll probably check those cheap notables against tangible bv as well and comment tomorrow.

Thanks

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#2) On February 27, 2013 at 9:54 PM, JohnCLeven (83.60) wrote:

And here i've asterisked those notables that have way different ratios when you use tangible book value instead. (Tangible price/graham in quotations) Data from gurufocus.com.

RDS.A - 0.62x (0.6x)

GLW – 0.65x (0.8x)

TOT – 0.68x (0.7x)

AFL – 0.73x (0.6x)

CVX – 0.80x (0.9x)

DFS – 0.87x (0.9x)

LXK – 0.88x

*UNH – 0.89x (neg)

*FLO - 0.90x(4.6x)

*ABT – 0.91x (3.6x)

KSS – 0.93x (1.0x)

INTC – 0.94x (1.2x)

*AZN – 0.98x (neg)

*RTN – 0.99x (neg)

*JOY – 1.01x (1.9x)

JOSB – 1.02x (1.3x)

CSCO – 1.07x (1.2x)

*HRS – 1.09x (neg)

F – 1.12x (1.0x)

NSC - 1.19x (1.2x)

CSX – 1.19x (1.3x)

AAPL – 1.26x (1.1x)

For what it's worth, I find KSS to be the most interesting.

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#3) On February 28, 2013 at 10:59 AM, EnigmaDude (96.53) wrote:

If you like Kohls (KSS) you might have an opportunity to get some shares cheap after today's earnings report:

Kohl’s Corp., meanwhile, reported a smaller-than-expected profit decline but gave a disappointing outlook.

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#4) On February 28, 2013 at 3:45 PM, JohnCLeven (83.60) wrote:

Thanks EnigmaDude!

I've considered buying KSS a few times in the past few weeks, but my COH keeps declining, and it's a positon I already have and have more confidence in. If I wasn't on a COH buying spree, there's a decent chance i'd be buying KSS.

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#5) On February 28, 2013 at 7:39 PM, NovaTodd (89.56) wrote:

I've tried to incorporate the Graham Number concept into my analysis. I've changed the formula around a bit to use Tangible Book Value, as you did in your follow-up, and FCF/Share instead of EPS. It provides a nice reference point when trying to ascertain something like a fair value in a no growth scenario. I've also thought about using a five year FCF average instead of just TTM to smooth out the normal business cycle but it tends to skew the numbers in favor of no-growth companies with historically strong earnings (HPQ, for example), making them look deceptively cheap. 

Happy to see a couple of my larger holdings (KSS, INTC) near the top of the list.  

 

 

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#6) On March 01, 2013 at 7:21 AM, JohnCLeven (83.60) wrote:

Thanks for the good feedback Nova!

I really like your CAPs picks by the way. Very similar to my own picks. I'll have to go through the picks you've made that I haven't made, as i'm sure I'll find some gems among them.

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#7) On March 04, 2013 at 7:16 PM, NovaTodd (89.56) wrote:

Thanks, John. I read your pitch for Kohl's some time back and figured we would have quite a bit of overlap. I hope you keep up with the blogging; I enjoy reading your posts. 

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