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  • 6 S&P 500 Dividend Stocks Undervalued By Free Cash Flow 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.
    Humana Inc fails the criteria for liabilities and dividends.
    L-3 Communications Holdings Inc fails the criteria for liabilities, debt and dividends.
    Northrop Grumman Corp fails the criteria for liabilities and debt.
    Principal Financial Group Inc fails all the criteria other than Sales and Earnings stability.
    Torchmark Corp fails the criteria for liabilities and debt.
    Apr 16, 2013. 09:04 AM | 2 Likes Like |Link to Comment
  • 10 Stocks Meeting Benjamin Graham's Defensive Criteria In 2013 [View article]
    Hello tyouth,

    Serenity excludes Goodwill and Intangibles while calculating Book value and for INTC, that comes to $7.13.
    Hence the lower Graham Number:
    GN = sqrt(22.5 x 2.13 EPS x 7.13 BVPS) = $18.49

    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.
    Mar 29, 2013. 12:36 AM | 2 Likes Like |Link to Comment
  • This Benjamin Graham Rule Encourages More Disciplined Investing [View article]
    Hi,

    Could you please give the source for this rule?

    In the Intelligent Investor, Graham recommends 3 different grades of stocks for investment, and 16 different criteria for finding them; including different PE criteria for different grades.

    Given below is the link to detailed article on seekingalpha

    "How To Build A Complete Benjamin Graham Portfolio"
    http://seekingalpha.co...

    --
    Serenity
    Dec 31, 2012. 10:12 AM | 2 Likes Like |Link to Comment
  • 10 Non Financial Stocks Trading Below Their Graham Number [View article]
    Serenity's Graham Number screener lists nearly a 1000 NYSE and NASDAQ stocks selling under their Graham Number.
    Link: http://bit.ly/RryASs

    But to use the Graham Number, a stock must first have uninterrupted earnings for the last 10 years, uninterrupted dividends for the last 20 years, and meet 4 other Defensive criteria.

    Cliffs Natural Resources Inc fails all Defensive criteria other than Sales and Earnings growth.
    Xerox Corp fails the liabilities, debt and dividend criteria.
    Hess Corp fails the liabilities, debt and earnings stability.
    And so on...

    Serenity gives a detailed Defensive breakup, as well as a complete Graham analysis, for all 4000 NYSE and NASDAQ stocks.

    --
    Serenity Stocks
    Dec 31, 2012. 09:54 AM | 2 Likes Like |Link to Comment
  • How To Build A Complete Benjamin Graham Portfolio [View article]
    A lot of people are probably already doing so, freeman8201.
    Maybe that's exactly why it meets Graham's criteria.

    Again, the reason Graham - and his followers like Buffett - do better than others is that they follow strategies that others don't.
    They would buy stocks like DMND when others would be afraid to.

    As Buffett said:
    "Be fearful when others are greedy, and be greedy when others are fearful"

    --
    Serenity Stocks
    Nov 30, 2012. 02:36 AM | 2 Likes Like |Link to Comment
  • A Complete Benjamin Graham Analysis For LinkedIn [View article]
    There is a popular joke that goes:

    A businessman interviewing job applications for the position of manager asked each applicant only one question, "What is two plus two?"
    The first interviewee was a journalist. His answer was, "Twenty-two".
    The second was a social worker. She said, "I don't know the answer but I'm very glad that we had the opportunity to discuss it."
    The third applicant was an engineer. He pulled out a slide rule and came up with an answer "somewhere between 3.999 and 4.001."
    Next came an attorney. He stated that "in the case of Jenkins vs. the Department of the Treasury, two plus two was proven to be four."
    Finally, the businessman interviewed an accountant. The accountant went over to the door, closed it and said in a low voice, "How much do you want it to be?"

    The point being, The Market Flash, is that there is a reason GAAP exists.
    If one were to do accounting according to one's own rules, almost any number can be shown for any metric. The only constraint would be how much sounds believable.

    Quoting here from investopedia:
    Link: http://bit.ly/XkmvRP

    "It is important as a savvy investor to ensure that the information you are using for comparison follows the GAAP rules and is not the (often more publicized) non-GAAP earnings number."
    Nov 17, 2012. 04:11 AM | 2 Likes Like |Link to Comment
  • A Unique List Of Fully Defensive Graham Stocks [View article]
    Thank you Vorgriff!

    If you need more stocks , please use Graham's Enterprising and NCAV grade stocks instead of partially Defensive stocks.
    Link: http://bit.ly/QYCMaj

    A stock should completely meet one of the sets of Graham's criteria to be eligible for investment.
    Oct 14, 2012. 12:33 AM | 2 Likes Like |Link to Comment
  • Ben Graham's Stock Valuing Formula: It Really Works [View article]
    In his book, Graham uses this formula to replicate other forecasting methods, while retrospectively showing how stocks never behave according to any such forecasts.
    In fact, he gives multiple warnings to never use any such formula.

    So if it's working for you, that's actually surprising.
    Sep 6, 2012. 09:48 AM | 2 Likes Like |Link to Comment
  • Ben Graham's Stock Valuing Formula: It Really Works [View article]
    Graham never intended this growth formula to actually be used to evaluate stocks. This is a very common but dangerous misconception.
    Sep 6, 2012. 03:00 AM | 2 Likes Like |Link to Comment
  • How Graham, Lynch, And Other Gurus' Strategies Have Quadrupled The Market Since '03 [View article]
    Can you share some more details on how you were implementing these strategies?
    Especially Graham?
    Aug 9, 2012. 09:40 AM | 2 Likes Like |Link to Comment
  • LeapFrog Is Selling Below Its Liquidation Value [View article]
    Graham's framework is designed to - among other things - identify troubled companies that are excessively undervalued by the market. Graham also designed his framework to work regardless of industry or business model.

    But if you're looking for a great business that has no problems and is also selling at great prices, good luck!
    Jan 28, 2015. 03:11 PM | 1 Like Like |Link to Comment
  • 225 Value Stocks Ready For Review [View article]
    The link in the above article cites the following as the "Graham formula" it uses:

    Intrinsic Value = EPS x (8.5 + 2xGrowth)

    Benjamin Graham actually gave several warnings about this formula and only used it to demonstrate why oversimplified growth estimates are unreliable. But due to a printing omission in recent editions of The Intelligent Investor, this formula is used often today instead of Graham's actual (and more thorough) methods.

    Article 1: http://seekingalpha.co... discusses the issue in detail.

    Graham spent nearly 50 years developing, backtesting and refining his investment framework; a framework that has withstood the test of time and has been endorsed by some of the world's most successful investors.

    For example, given below are the actual Graham ratings for Snap-on Incorporated (SNA), with no adjustments other than those for inflation.

    Defensive Graham investment requires all the ratings to be at least 100%.
    Enterprising Graham investment requires the ratings to be at least - N/A, 75%, 90%, 50%, 5%, N/A and 137%.

    Snap-on Incorporated - Graham Ratings
    Sales | Size (100% ⇒ $500 Million): 612.00%
    Current Assets ÷ [2 x Current Liabilities]: 125.54%
    Net Current Assets ÷ Long Term Debt: 125.84%
    Earnings Stability (100% ⇒ 10 Years): 100.00%
    Dividend Record (100% ⇒ 20 Years): 100.00%
    Earnings Growth (100% ⇒ 30% Growth): 263.97%
    Graham Number ÷ Previous Close: 50.73%

    The Final Graham Assessment for Snap-on Incorporated is also given below.
    The Quantitative Result (Intrinsic Value ÷ Previous Close) for a stock has to be 100% for true Graham investment.

    Snap-on Incorporated - Final Graham Assessment
    Defensive Price (Graham Number): $67.25
    Enterprising Price (Serenity Number): $37.10
    NCAV Price: $-3.45
    Qualitative Result: Excellent / Defensive
    Intrinsic Value: $67.25
    Previous Close: $132.56
    Quantitative Result: 50.73%

    Please note that not all stocks failing Graham's rules are necessarily bad investments. Graham's rules are just extremely selective. It's more a question of how to get the "best" long-term results.

    Article 2: http://seekingalpha.co... shows how one can assess 5000+ NYSE and NASDAQ stocks by a similar 17-point Benjamin Graham assessment, with no adjustments other than those for inflation.
    Jan 21, 2015. 11:09 AM | 1 Like Like |Link to Comment
  • Johnson & Johnson Dividend Stock Analysis [View article]
    Please note that before being checked against the Graham Number, Benjamin Graham required that a stock first meet six other qualitative criteria.

    For example, given below are all Graham ratings for Johnson & Johnson (JNJ).

    Defensive Graham investment requires all the ratings to be at least 100%.
    Enterprising Graham investment requires the ratings to be at least - N/A, 75%, 90%, 50%, 5%, N/A and 137%.

    Johnson & Johnson - Graham Ratings
    Sales | Size (100% ⇒ $500 Million): 14,262.00%
    Current Assets ÷ [2 x Current Liabilities]: 109.85%
    Net Current Assets ÷ Long Term Debt: 230.58%
    Earnings Stability (100% ⇒ 10 Years): 100.00%
    Dividend Record (100% ⇒ 20 Years): 100.00%
    Earnings Growth (100% ⇒ 30% Growth): 96.48%
    Graham Number ÷ Previous Close: 48.94%

    The Final Graham Assessment for Johnson & Johnson is also given below.
    The Quantitative Result (Intrinsic Value ÷ Previous Close) for a stock has to be 100% for true Graham investment.

    Johnson & Johnson - Final Graham Assessment
    Defensive Price (Graham Number): $50.55
    Enterprising Price (Serenity Number): $22.77
    NCAV Price: $-0.79
    Qualitative Result: Good / Enterprising
    Intrinsic Value: $22.77
    Previous Close: $103.28
    Quantitative Result: 22.05%

    This does not imply that stocks not clearing Graham's rules are always bad investments. Graham's rules are just extremely selective. It's more a question of how to get the "best" long-term results.

    Graham spent nearly 50 years developing, backtesting and refining his investment framework; a framework that has withstood the test of time and has been endorsed by some of the world's most successful investors.

    http://seekingalpha.co... shows how one can assess 5000+ NYSE and NASDAQ stocks by an exact Benjamin Graham assessment, with no adjustments other than those for inflation.
    Jan 7, 2015. 03:25 PM | 1 Like Like |Link to Comment
  • FutureFuel Poised For Strong Rebound [View article]
    For a more complete Benjamin Graham analysis, Future Fuel Corporation can also be checked against Graham's Enterprising and NCAV criteria (as well as the more accurately inflation-adjusted $500 million in sales).

    Given below are all the Graham ratings for Future Fuel Corporation (FF), with no adjustments other than those for inflation.

    Defensive Graham investment requires all the ratings to be at least 100%.
    Enterprising Graham investment requires the ratings to be at least - N/A, 75%, 90%, 50%, 5%, N/A and 137%.

    Future Fuel Corporation - Graham Ratings
    Sales | Size (100% ⇒ $500 Million): 88.98%
    Current Assets ÷ [2 x Current Liabilities]: 350.62%
    Net Current Assets ÷ Long Term Debt: 100.00%
    Earnings Stability (100% ⇒ 10 Years): 80.00%
    Dividend Record (100% ⇒ 20 Years): 15.00%
    Earnings Growth (100% ⇒ 30% Growth): 908.83%
    Graham Number ÷ Previous Close: 103.50%

    The Final Graham Assessment for Future Fuel Corporation is also given below.
    The Quantitative Result (Intrinsic Value ÷ Previous Close) for a stock has to be 100% for true Graham investment.

    Future Fuel Corporation - Final Graham Assessment
    Defensive Price (Graham Number): $13.48
    Enterprising Price (Serenity Number): $11.76
    NCAV Price: $4.55
    Qualitative Result: Good / Enterprising
    Intrinsic Value: $11.76
    Previous Close: $13.02
    Quantitative Result: 90.32%

    Article 2: http://seekingalpha.co... shows how one can check 5000+ NYSE and NASDAQ for a similar exact Benjamin Graham assessment, with no adjustments other than those for inflation.
    Dec 27, 2014. 11:10 AM | 1 Like Like |Link to Comment
  • ModernGraham Quarterly Valuation Of Oracle [View article]
    The ModernGraham website lists the following formula as one of the evaluation methods it uses:

    Intrinsic Value = EPS x (8.5 + 2xGrowth)

    Benjamin Graham actually gave several warnings about this formula and only used it to demonstrate why oversimplified growth estimates are unreliable. But due to a printing omission in recent editions of The Intelligent Investor, this formula is used often today instead of Graham's actual (and more thorough) methods.

    Article 1: http://seekingalpha.co... discusses the issue in detail.

    In fact, most of what Graham actually taught has been forgotten today or is applied incorrectly.

    Another example, again from the above article, is:
    "Adequate Size of Enterprise - market capitalization of at least $2 billion"

    Graham actually recommended "Not less than $100 million of annual sales" for this criterion. Checking for Market Capitalization instead of Sales will - all other things being equal - rate overvalued stocks higher than undervalued ones. Other rules mentioned here too - such as dividend record, and PE & PB ratios - are all very different from what Graham actually recommended.

    Graham spent nearly 50 years developing, backtesting and refining an investment framework that has withstood the test of time, and has been endorsed by some of the world's most successful investors. Modifying Graham's rules so heavily seems very ill-advised.

    Given below are the actual Graham ratings for Oracle Corp (ORCL), with no adjustments other than those for inflation.

    Defensive Graham investment requires all the ratings to be at least 100%.
    Enterprising Graham investment requires the ratings to be at least - N/A, 75%, 90%, 50%, 5%, N/A and 137%.

    Oracle Corp - Graham Ratings
    Sales | Size (100% ⇒ $500 Million): 7,436.00%
    Current Assets ÷ [2 x Current Liabilities]: 161.95%
    Net Current Assets ÷ Long Term Debt: 155.83%
    Earnings Stability (100% ⇒ 10 Years): 100.00%
    Dividend Record (100% ⇒ 20 Years): 25.00%
    Earnings Growth (100% ⇒ 30% Growth): 274.01%
    Graham Number ÷ Previous Close: 46.02%

    The Final Graham Assessment for Oracle Corp is also given below.
    The Quantitative Result (Intrinsic Value ÷ Previous Close) for a stock has to be 100% for true Graham investment.

    Oracle Corp - Final Graham Assessment
    Defensive Price (Graham Number): $21.22
    Enterprising Price (Serenity Number): $8.14
    NCAV Price: $0.97
    Qualitative Result: Good / Enterprising
    Intrinsic Value: $8.14
    Previous Close: $46.10
    Quantitative Result: 17.66%

    Article 2: http://seekingalpha.co... shows how one can assess 5000+ NYSE and NASDAQ stocks by a similar exact Benjamin Graham assessment, with no adjustments other than those for inflation.
    Dec 27, 2014. 11:03 AM | 1 Like Like |Link to Comment
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