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  • AT&T Inc. Dividend Stock Analysis [View article]
    Even though AT&T (T) has a Reported Book Value of $17.41, it has a (negative) Tangible Book Value of -$6.48.

    So the result of a complete Benjamin Graham analysis for AT&T is:

    Defensive Price (Graham Number): $0.00
    Enterprising Price (Serenity Number): $0.00
    NCAV Price: -$28.17
    Qualitative Result: OK / NCAV
    Graham Price: -$28.17
    Previous Close: $32.38
    Quantitative Result: 0.00%

    Also, 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 the Defensive criteria, Graham also specified separate sets of criteria for Enterprising and NCAV stocks.

    Given below are the Defensive ratings for AT&T:
    [a rating of 100% or more indicates that the stock clears that criteria]

    Sales: 25,486.00%
    Assets / Liabilities: 35.72%
    Assets / Debt: 0.00%
    Earnings Stability: 100.00%
    Dividend Record: 100.00%
    Earnings Growth: 79.93%
    Graham Number / Price: 0.00%

    http://seekingalpha.co... gives step-by-step instructions on how to build a complete Benjamin Graham portfolio.
    Mar 13 03:00 PM | Likes Like |Link to Comment
  • Colgate-Palmolive Dividend Stock Analysis [View article]
    Even though Colgate-Palmolive Co (CL) has a Reported Book Value of $3.80, it has a (negative) Tangible Book Value of -$3.87.

    So the result of a complete Graham analysis for Colgate-Palmolive Co is:

    Defensive Price (Graham Number): $0.00
    Enterprising Price: -$4.64
    NCAV Price: -$14.21
    Graham Grade: Ungraded
    Graham Price: $0.00
    Current Price: $62.39
    Graham Result: Overvalued

    Also, 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 the Defensive criteria, Graham also specified separate sets of criteria for Enterprising and NCAV stocks.

    Given below are the Defensive ratings for Colgate-Palmolive Co:
    [a rating of 100% or more indicates that the stock clears that criteria]

    Sales: 3,418.00%
    Assets / Liabilities: 60.97%
    Assets / Debt: 16.65%
    Earnings Stability: 100.00%
    Dividend Record: 100.00%
    Earnings Growth: 151.69%

    To learn how to build a complete Benjamin Graham portfolio, see http://seekingalpha.co...
    Jan 27 09:44 AM | Likes Like |Link to Comment
  • The 'Real Story' Behind Orexigen Therapeutics, Inc. [View article]
    Actually, this is what Benjamin Graham wrote about short selling:
    "selling short a too popular and therefore overvalued issue is apt to be a test not only of one’s courage and stamina but also of the depth of one’s pocketbook. The principle is sound, its successful application is not impossible, but it is distinctly not an easy art to master."

    Going short is hard for retail investors simply because it requires a lot more resources to pull off successfully. Graham actually recommended 3 different types of stocks for investment - Defensive, Enterprising and NCAV - and 16 criteria for finding them.

    Given below are each of the individual ratings for Graham's Defensive criteria for Orexigen Therapeutics Inc (OREX):

    Sales: 0.69%
    Assets / Liabilities: 276.56%
    Assets / Debt: 100.00%
    Earnings Stability: 0.00%
    Dividend Record: 0.00%
    Earnings Growth: 0.00%
    Graham Number / Price: 0.00%
    [a rating of 100% or more indicates that the stock clears that criteria]

    The final Graham result for Orexigen Therapeutics Inc is:

    Defensive Price (Graham Number): $0.00
    Enterprising Price: -$12.70
    NCAV Price: $0.89
    Graham Grade: Ungraded
    Graham Price: $0.00
    Current Price: $5.62
    Graham Result: Overvalued

    For a tutorial on how to invest as taught by Benjamin Graham, see http://seekingalpha.co...
    Dec 26 07:43 AM | Likes Like |Link to Comment
  • General Mills, Inc. Dividend Stock Analysis [View article]
    Benjamin Graham actually recommended 3 different types of stocks for investment - Defensive, Enterprising and NCAV - and 16 criteria for finding them.

    Given below are each of the individual ratings for Graham's Defensive criteria for General Mills Inc (GIS):

    Sales: 3,332.00%
    Assets / Liabilities: 48.03%
    Assets / Debt: 0.00%
    Earnings Stability: 100.00%
    Dividend Record: 100.00%
    Earnings Growth: 143.25%
    Graham Number / Price: 0.00%
    [a rating of 100% or more indicates that the stock clears that criteria]

    The final Graham result for GIS is:

    Defensive Price (Graham Number): $0.00
    Enterprising Price: -$11.96
    NCAV Price: -$16.94
    Graham Grade: Ungraded
    Graham Price: $0.00
    Current Price: $51.44
    Graham Result: Overvalued

    For more information, see How To Build A Complete Benjamin Graham Portfolio: http://seekingalpha.co...
    Dec 10 07:54 AM | Likes Like |Link to Comment
  • Chicago Rivet & Machine: Graham And Buffett Would Have Loved This Boring Value Stock [View article]
    Sorry, but Benjamin Graham never recommended using that intrinsic value formula. In fact, he used it (with backtesting) to show why such simplistic formulas were unreliable, and warned against using them.

    More details here: http://seekingalpha.co...

    Graham actually recommended 3 different types of stocks for investment - Defensive, Enterprising and NCAV - and 16 criteria for finding them.

    For details, see How To Build A Complete Benjamin Graham Portfolio: http://seekingalpha.co...
    Dec 10 07:42 AM | Likes Like |Link to Comment
  • How To Build A Complete Benjamin Graham Portfolio [View article]
    To repeat a line from the reply above:

    "The reason Graham and his followers do better than others is because they do things others don't."
    Dec 6 10:59 PM | Likes Like |Link to Comment
  • Pepsico, Inc. Dividend Stock Analysis [View article]
    Graham actually recommended 3 different types of stocks for investment - Defensive, Enterprising and NCAV - and 16 criteria for finding them.

    Given below are each of the individual ratings for Benjamin Graham's Defensive criteria for PepsiCo Inc (PEP):
    (a rating above 100% indicates that the stock clears that criteria).

    Sales: 13,098.00%
    Assets / Liabilities: 54.77%
    Assets / Debt: 6.93%
    Earnings Stability: 100.00%
    Dividend Record: 100.00%
    Earnings Growth: 131.26%
    Graham Number / Price: 0.00%

    Thus, PepsiCo Inc clears all Defensive criteria expect those for Assets, Liabilities and EPS/Book-Value.

    The final Graham result for PepsiCo Inc is:

    Defensive Price (Graham Number): $0.00
    Enterprising Price: -$8.62
    NCAV Price: -$21.70
    Graham Grade: Ungraded
    Graham Price: $0.00
    Current Price: $84.39
    Nov 27 12:18 AM | Likes Like |Link to Comment
  • S&P 500 Best Dividend Stocks According To Graham Principles [View article]
    Benjamin Graham recommended 3 different types of stocks for investment - Defensive, Enterprising and NCAV - and 16 criteria for finding them.

    Doing a complete Graham analysis for the above three stocks, we get:

    Helmerich & Payne Inc
    Reported Book Value: $39.26
    Tangible Book Value: $36.28
    Defensive Price (Graham Number): $68.21
    Enterprising Price: $43.54
    NCAV Price: -$9.37
    Graham Grade: Excellent / Defensive
    Graham Price: $68.21
    Current Price: $78.06

    Joy Global Inc
    Reported Book Value: $25.54
    Tangible Book Value: $5.72
    Defensive Price (Graham Number): $30.29
    Enterprising Price: $6.86
    NCAV Price: -$3.86
    Graham Grade: Good / Enterprising
    Graham Price: $6.86
    Current Price: $56.72

    National Oilwell Varco Inc
    Reported Book Value: $48.22
    Tangible Book Value: $19.50
    Defensive Price (Graham Number): $49.48
    Enterprising Price: $23.40
    NCAV Price: $10.38
    Graham Grade: Good / Enterprising
    Graham Price: $23.40
    Current Price: $83.56

    Also given below are the individual ratings for each of Graham's defensive criteria for the above three stocks (a rating above 100% indicates that the stock clears that criteria).

    Helmerich & Payne Inc
    Sales: 630.00%
    Assets / Liabilities: 117.43%
    Assets / Debt: 263.63%
    Earnings Stability: 100.00%
    Dividend Record: 100.00%
    Earnings Growth: 518.08%

    Joy Global Inc
    Sales: 1,132.00%
    Assets / Liabilities: 88.61%
    Assets / Debt: 105.25%
    Earnings Stability: 100.00%
    Dividend Record: 55.00%
    Earnings Growth: 630.26%

    National Oilwell Varco Inc
    Sales: 4,008.00%
    Assets / Liabilities: 138.77%
    Assets / Debt: 318.58%
    Earnings Stability: 100.00%
    Dividend Record: 25.00%
    Earnings Growth: 515.59%
    Nov 15 03:39 PM | Likes Like |Link to Comment
  • Raytheon Dividend Stock Analysis [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.

    And in addition to the criteria for Defensive stocks, Graham also specified separate sets of criteria for Enterprising and NCAV stocks - http://seekingalpha.co...
    Nov 15 06:22 AM | Likes Like |Link to Comment
  • ModernGraham Valuation Of 3M [View article]
    Hello Benjamin Clark,

    Benjamin Graham backtested his criteria for up to 50 years before recommending them.
    Is it really a good idea to modify them so much?

    Graham also gave some additional criteria to the ones listed here.
    For Defensive stocks, Graham also required "2-B. Long-term debt should not exceed the net current assets."
    And for Enterprising stocks, he required "Price: Less than 120% net tangible assets. [For issues selling at P/E multipliers under 10]"

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

    Doing an analysis for 3M (MMM) with Graham's unmodified criteria, we get:

    Defensive Price (Graham Number): $41.43
    Enterprising Price: $14.44
    NCAV Price: -$3.89
    Graham Grade: Excellent / Defensive
    Graham Price: $41.43
    Current Price: $124.92 (Overvalued)

    (3M has a Tangible Book Value of only $12.03).

    Also given below is a percentage rating by each of Graham's Defensive criteria for 3M.
    For Defensive Graham investment, all the below ratings need to be at least 100%.

    Sales: 5,980.00% (Inflation Adjusted)
    Assets / Liabilities: 109.92%
    Assets / Debt: 148.99%
    Earnings Stability: 100.00%
    Dividend Record: 100.00%
    Earnings Growth: 127.52%

    Source:
    serenitystocks.com
    Oct 30 03:07 AM | Likes Like |Link to Comment
  • A Winning Dividend Portfolio According To Graham Principles [View article]
    Hello Arie Goren,

    Is this analysis based on Benjamin Graham's Enterprising Criteria?
    In that case, shouldn't it also include a "PE of not more than 10" and a "Price less than 120% net tangible assets"?

    Summarized from Chapter 15 of The Intelligent Investor - Stock Selection for the Enterprising Investor:
    [Note: 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.

    More details: http://seekingalpha.co...
    "Tweaking Benjamin Graham's Stock Selection Criteria"
    Oct 23 04:47 PM | Likes Like |Link to Comment
  • How To Build A Complete Benjamin Graham Portfolio [View article]
    Thank you, nothingveryclever!
    Oct 13 04:13 PM | Likes Like |Link to Comment
  • How To Build A Complete Benjamin Graham Portfolio [View article]
    Hello imklevr,

    These screens are from the Serenity Stocks website - serenitystocks.com

    These screenshots were taken before Serenity was last upgraded. The new website looks a little different but has all the same features, plus a little more.
    Oct 13 04:12 PM | Likes Like |Link to Comment
  • Perception And Reality: Focus On Earnings [View article]
    The problem is that most stock evaluations today are done without paying heed to tangible vs intangible assets - or even deliberately ignoring the difference. So in effect, people do end up investing in intangibles when buying stocks following these evaluations.

    And the evaluation of intangibles is, at best, a highly imperfect science. Here is what Graham himself wrote on the topic.

    "We were not willing to accept the prospects and promises of the future as compensation for a lack of sufficient value in hand. This has by no means been the standard viewpoint among investment authorities; in fact, the majority would probably subscribe to the view that prospects, quality of management, other intangibles, and “the human factor” far out- weigh the indications supplied by any study of the past record, the balance sheet, and all the other cold figures."
    - From "The Intelligent Investor"

    "A generation or more ago it was the standard rule, recognized both in average stock prices and in formal or legal valuations, that intangibles were to be appraised on a more conservative basis than tangibles. ... But what has happened since the 1920s? Essentially the exact reverse of these relationships may now be seen. A company must now typically earn about 10 per cent on its common equity to have it sell in the average market at full book value. But its excess earnings, above 10 per cent on capital, are usually valued more liberally, or at a higher multiplier, than the base earnings required to support the book value in the market. "
    - From "The Intelligent Investor"

    Thus, the best measure of a company's intangibles is its excess of earnings over that possible from its tangible assets alone. And this calculation of a stock's worth from the combination of its tangible assets and its total earnings is already fully accounted for in Graham's stock selection methods.
    Details: http://seekingalpha.co...
    Oct 8 11:50 PM | Likes Like |Link to Comment
  • Invest In Stocks With A Margin Of Safety To Reduce Risk And Enhance Returns [View article]
    Hello DJMJ,

    Teva Pharmaceutical Industries (TEVA) has a Reported Book Value of $26.66 but a Tangible Book Value of only -$4.47 (negative). This is why Serenity does not a list positive Graham (Defensive, Enterprising or NCAV) prices for TEVA.

    Apart from Graham's quantitative price calculations, TEVA also does not meet some of Graham's qualitative requirements for investment.

    Below is a percentage rating by each of Graham's Defensive criteria, for TEVA.

    Sales: 4,064.00%
    Assets / Liabilities: 63.45%
    Assets / Debt: 29.60%
    Earnings Stability: 100.00%
    Dividend Record: 100.00%
    Earnings Growth: 170.85%

    For Defensive Graham investment, all the above ratings need to be at least 100%.
    Details: http://seekingalpha.co...

    For Enterprising Graham investment, Assets / Liabilities and Assets / Debt have to be at least 75% and 90% respectively.
    Details: http://seekingalpha.co...

    TEVA might possibly be clearing the simplistic "Benjamin Graham Formula". But note that Graham warned against using that formula and only gave it for illustrative purposes.
    Details: http://seekingalpha.co...
    Oct 7 04:25 AM | Likes Like |Link to Comment
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