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  • The Most Important Thing To Know If You're Using Stocks As Fixed Income [View article]
    Nice article!

    Graham provided the following definition - "An investment operation is one which, upon thorough analysis, promises safety of principal and an adequate return. Operations not meeting these requirements are speculative."

    Without dividends, there cannot be a "promise" of adequate return. One would be at the mercy of market corrections to see any ROI.
    (Except for buying NCAV stocks, where one effectively buys more cash for less cash)

    However, Corrections Corporation of America (CXW) and AT&T (T) don't meet Benjamin Graham's criteria for Defensive, Enterprising or NCAV investment.
    Garmin (GRMN) is not among the 4500 stocks analyzed automatically on Serenity for Graham's criteria.
    May 25 11:19 PM | Likes Like |Link to Comment
  • Benjamin Graham's Rules For The Common Stock Component: Marathon Petroleum Corporation [View article]
    In later chapters, Graham gives more specific numbers for each of these criteria.

    MPC fails criteria 2-A, 3, 4 and 5.

    Summarized from Chapter 14 of The Intelligent Investor - Stock Selection for the Defensive Investor:
    1. Not less than $100 million of annual sales.
    [Note: This works out to $500 million today based on the difference in CPI/Inflation from 1973]
    2-A. Current assets should be at least twice current liabilities.
    2-B. Long-term debt should not exceed the net current assets.
    3. Some earnings for the common stock in each of the past 10 years.
    4. Uninterrupted [dividend] payments for at least the past 20 years.
    5. A minimum increase of at least one-third in per-share earnings in the past 10 years.
    6. Current price should not be more than 15 times average earnings.
    7. Current price should not be more than 1-1⁄2 times the book value.
    As a rule of thumb, we suggest that the product of the multiplier times the ratio of price to book value should not exceed 22.5.
    May 25 11:04 PM | Likes Like |Link to Comment
  • 10 Stocks Meeting Benjamin Graham's NCAV Criteria In May [View article]
    Thank you very much, alpha bet soup!

    However, do note that the $1,526.34 Million, $784.84 Million and 141.94 Million for XIN on Serenity's data feed also correspond exactly to the balance sheet figures on Google finance.

    Also FYI, the Book Value given here is the Tangible Book Value calculated by Serenity, not the reported Book Value which usually includes Goodwill and other Intangibles.
    May 14 09:54 PM | Likes Like |Link to Comment
  • 10 Stocks Meeting Benjamin Graham's Defensive Criteria In 2013 [View article]
    Update: Weis Markets Inc (WMK) now appears to be a fully defensive Graham stock.
    May 13 01:57 PM | Likes Like |Link to Comment
  • Verizon Communications Inc: Dividend Stock Analysis [View article]
    Given below is the result of the full 16-step Benjamin Graham analysis for Verizon Communications Inc:

    Defensive Price (Graham Number): $0.00
    Enterprising Price: -$31.34
    NCAV Price: -$59.76
    Graham Grade: Ungraded

    To be checked against the Graham Number, Benjamin Graham required that a stock first have uninterrupted earnings for the previous 10 years, uninterrupted dividends for the previous 20 years, and meet 4 other Defensive criteria.

    Verizon Communications Inc fails all criteria other than Sales and Dividend Record.
    Sales: 23,170.00%
    Liabilities: 39.39%
    Debt: 0.00%
    Earnings Stability: 40.00%
    Dividend Record: 100.00%
    Earnings Growth: 23.74%
    May 3 08:10 AM | Likes Like |Link to Comment
  • Hedge Funds Are Buying These 5 Stocks Undervalued By Earnings Growth And The Graham Number [View article]
    To be checked against the Graham Number, Benjamin Graham required that a stock first have uninterrupted earnings for the previous 10 years, uninterrupted dividends for the previous 20 years, and meet 4 other Defensive criteria.

    Aflac Inc fails the criteria for Liabilities and Debt.
    Encore Capital Group Inc fails the criteria for Liabilities, Debt and Dividends.
    Cardinal Financial Corp fails all criteria other than Earnings Growth and Earnings Stability.
    Kronos Worldwide Inc fails all criteria other than Sales and Earnings Growth.
    CAI International Inc fails all criteria other than Earnings Growth.
    Apr 26 08:14 AM | Likes Like |Link to Comment
  • What Is Mr. Market's Mood Today? [View article]
    Thank you, Dividend Sleuth!

    But perhaps Warren Buffett explained it best when he simply said - "the market is manic-depressive".
    Apr 25 05:14 PM | Likes Like |Link to Comment
  • What Is Mr. Market's Mood Today? [View article]
    Given below is the result of the full 16-step Benjamin Graham analysis for Eaton Corporation:

    Defensive Price (Graham Number): $0.00
    Enterprising Price: -$15.53
    NCAV Price: -$27.44
    Graham Grade: Ungraded

    To be checked against the Graham Number, Benjamin Graham required that a stock first have uninterrupted earnings for the previous 10 years, uninterrupted dividends for the previous 20 years, and meet 4 other Defensive criteria.
    In addition to having a Graham Number of Zero, Eaton Corporation also fails the criteria for liabilities and debt.

    Serenity excludes Goodwill and Intangibles while calculating Book Values and for ETN, such a BVPS evaluates to -$12.94.
    Hence the non-existent (Zero) Graham Number for ETN.

    GN = sqrt(22.5 x EPS x BVPS) = square root of a negative number for ETN.

    Book Value, also known as Net Tangible Assets, is the theoretical liquidation value per share and is not traditionally supposed to include Goodwill and Intangibles.

    But in practice, this is not always followed.
    So instead of using reported Book Values, Serenity calculates Book Values from balance sheets.
    Apr 23 03:27 PM | Likes Like |Link to Comment
  • Raytheon Company Dividend Stock Analysis [View article]
    (Response given to an email query about the above)

    Serenity excludes Goodwill and Intangibles while calculating Book value and for RTN, such a BVPS evaluates to -$16.45.

    Hence the non-existent (Zero) Graham Number for RTN.
    GN = sqrt(22.5 x EPS x BVPS) = square root of a negative number for RTN.

    Book value, also known as Net Tangible Assets, is the theoretical liquidation value of a share and is not traditionally supposed to include Goodwill and Intangibles.

    But in practice, this is not always followed.
    So Serenity does not use reported Book Values.
    Apr 22 01:36 PM | Likes Like |Link to Comment
  • All Star Battle: Graham Vs. Piotroski [View article]
    Graham recommended 3 different grades of stocks for investment - Defensive, Enterprising and NCAV - and 16 criteria for finding them.

    He backtested these criteria for decades before recommending them.

    But perhaps the best backtest of all is Buffett's famous speech "The Superinvestors of Graham-and-Doddsville" that meticulously explains why all of Graham's students have been extraordinarily successful.
    Apr 22 08:32 AM | Likes Like |Link to Comment
  • Raytheon Company Dividend Stock Analysis [View article]
    Given below is the result of the full 16-step Benjamin Graham analysis for Raytheon Co:

    Defensive Price (Graham Number): $0.00
    Enterprising Price: -$19.74
    NCAV Price: -$28.70
    Graham Grade: Ungraded

    And to be checked against the Graham Number, Benjamin Graham required that a stock first have uninterrupted earnings for the previous 10 years, uninterrupted dividends for the previous 20 years, and meet 4 other Defensive criteria.

    Raytheon Co fails the criteria for liabilities and debt.
    Apr 22 08:22 AM | Likes Like |Link to Comment
  • Graham Value Stock Portfolio Update [View article]
    Your criteria sound very similar to Benjamin Graham's Stock Selection criteria for the Enterprising Investor.

    Summarized from CHAPTER 15 of The Intelligent Investor - Stock Selection for the Enterprising Investor:
    [For issues selling at P/E multipliers under 10]
    "1-A. Current assets at least 1-1⁄2 times current liabilities.
    1-B. Debt not more than 110% of net current assets.
    2. Earnings stability: No deficit in the last five years covered in the Stock Guide.
    3. Dividend record: Some current dividend.
    4. Earnings growth: Last year's earnings more than those of 1966.
    [Note: This corresponds approximately to the earnings of 2008 today]
    5. Price: Less than 120% net tangible assets."

    http://seekingalpha.co... gives a list of 5 Stocks Meeting Benjamin Graham's Enterprising Criteria In 2013:
    Apr 17 09:34 AM | Likes Like |Link to Comment
  • 3 Stocks You Shouldn't Sell [View article]
    Given below is the result of the full 16-step Benjamin Graham analysis for the above stocks:

    Amazon.com Inc
    Defensive Price (Graham Number): $0.00
    Enterprising Price: -$0.90
    NCAV Price: -$6.76
    Graham Grade: Ungraded

    Intuitive Surgical Inc
    Defensive Price (Graham Number): $172.80
    Enterprising Price: $99.66
    NCAV Price: $35.17
    Graham Grade: OK / NCAV
    Graham Price: $35.17
    Current Price: $509.99

    Nike Inc
    Defensive Price (Graham Number): $23.67
    Enterprising Price: $12.61
    NCAV Price: $7.02
    Graham Grade: Excellent / Defensive
    Graham Price: $23.67
    Current Price: $59.67
    Apr 16 09:14 AM | Likes Like |Link to Comment
  • How To Build A Complete Benjamin Graham Portfolio [View article]
    Quoting from "General Portfolio Policy: The Defensive Investor" of The Intelligent Investor:

    "It has been an old and sound principle that those who cannot afford to take risks should be content with a relatively low return on their invested funds. From this there has developed the general notion that the rate of return which the investor should aim for is more or less proportionate to the degree of risk he is ready to run. Our view is different. The rate of return sought should be dependent, rather, on the amount of intelligent effort the investor is willing and able to bring to bear on his task. The minimum return goes to our passive investor, who wants both safety and freedom from concern. The maximum return would be realized by the alert and enterprising investor who exercises maximum intelligence and skill."

    And from Warren Buffett's Preface to The Intelligent Investor:

    "Whether you achieve outstanding results will depend on the effort and intellect you apply to your investments, as well as on the amplitudes of stock-market folly that prevail during your investing career"
    Apr 13 09:09 AM | Likes Like |Link to Comment
  • 4 Outperforming Dividend Stocks Undervalued By The Graham Number [View article]
    To be checked against the Graham Number, Benjamin Graham required that a stock first have uninterrupted earnings for the previous 10 years, uninterrupted dividends for the previous 20 years, and meet 4 other Defensive criteria.

    Allstate Corp fails all the criteria other than Sales and Dividend record.
    Fulton Financial Corp also fails all the criteria other than Sales and Dividend record.
    Principal Financial Group Inc fails all the criteria other than Sales and Earnings stability.
    First Interstate Bancsystem Inc fails all six criteria.
    Apr 10 11:02 AM | Likes Like |Link to Comment
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