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Invest Like Benjamin Graham in Singapore Stocks

April 07, 2014 | About:
junming82

junming82

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Benjamin Graham is the father of value investing and his way of value investing was to search for net-net stocks, and construct a basket of them as his portfolio. His method of value investing is still being widely practiced by value investors such as Seth Klarman (Trades, Portfolio), Third Avenue Management (Trades, Portfolio), etc. In this blog post, I would like to refer to an article by CLSA to explore the idea of investing in Graham-like stocks in the Singapore stock market.

They construct a stock screen that incorporates the attributes that Ben Graham looks for in a undervalued stocks and run the stock screen through all the SGX stocks to find stocks that fulfill it. The end result of this stock screen is the Ben Graham Number.

What Is the Ben Graham Number?

Graham Number is a concept based on Ben Graham's conservative valuation of companies. Graham Number is calculated as follows:

Graham Number = SquareRoot of (22.5 * Tangible Book Value per Share * Earnings per Share)
= SquareRoot of (22.5 * Net Income * Total Equity) / Total Shares Outstanding

Which Singapore stocks pass the Ben Graham Screener?

The following list of stocks passes:
F&N
City Dev
Keppel Land
Ezion
Parkinson Retail Asia

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