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A Unique List of Fully Defensive Graham Stocks
Posted by: SerenityStocks (IP Logged)
Date: October 18, 2012 10:28AM
Benjamin Graham was a British-born American economist and professional investor, who taught Warren Buffett and other world-famous investors at Columbia Business School.
Buffett credits Graham with grounding him with a sound intellectual investment framework and describes him as the second most influential person in his life, after his own father.
In fact, Graham had such an overwhelming influence on his students that two of them, Warren Buffett and Irving Kahn, named their sons, Howard Graham Buffett and Thomas Graham Kahn, after him.
In his preface to Graham's book, "The Intelligent Investor," Buffett calls it "by far the best book about investing ever written."
Graham's Defensive-Grade Criteria:
Graham actually recommended three different grades of stocks, and the now-popular Graham Number actually covers only two of the seven criteria required by the first grade.
This highest grade of stocks is what Graham called the "defensive" grade. There are seven unique financial criteria that a stock has to meet before it can be used for defensive investment (the Graham Number covers only the last two):
Quote:A Few Defensive Grade Stocks:
Given below is a unique list of stocks meeting all of Graham's seven defensive criteria today, along with their values for each of the criteria.
*All figures except prices and percentages are in $Millions
The criteria are being checked against values adjusted for increases due to inflation for more accurate results.
For example, $500 million has been used as the minimum required sales figure instead of the $100 million recommended by Graham. This corresponds to a CPI growth of 5x since 1973.
Defensive stocks are also the only grade of Graham stocks in which the Graham Price is equal to the Graham Number.
The Graham Number is essentially the highest price recommended by Graham for defensive stocks. The recommended price for enterprising-grade and NCAV-grade stocks use different calculations and are much lower than the Graham Number.
The S&P Total Market Index includes all common equities listed on the New York Stock Exchange (including NYSE Arca), the NYSE Amex, the NASDAQ Global Select Market, the NASDAQ Global Market and the NASDAQ Capital Market.
The free comprehensive Benjamin Graham screener screens all 4,000 stocks in the S&P Total Market Index
— using 40 data points each — to show the complete list of stocks that meet all of Graham's three grades of selection criteria.
The screening system includes complete checks for defensive and enterprising stocks with inflation adjustments, as well as the usually omitted checks for recent net losses for NCAV or net-net stocks.
Disclaimer: The lists of stocks were arrived at by automated quantitative analysis and were not verified individually. Check for any recent changes in the data used before making an investment decision, especially for any recent stock splits.
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