Ali Alghanim Sons Automotive Co KSC (KUW:ALG) Graham Number : KWD0.81 (As of Mar. 2024)

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What is Ali Alghanim Sons Automotive Co KSC Graham Number?

Graham Number is a figure that measures a stock's fundamental value by taking into account the company's earnings per share and book value per share. The Graham number is the upper bound of the price range that a defensive investor should pay for the stock. According to the theory, any stock price below the Graham number is considered undervalued, and thus worth investing in.

As of today (2024-05-17), the stock price of Ali Alghanim Sons Automotive Co KSC is KWD1.105. Ali Alghanim Sons Automotive Co KSC's graham number for the quarter that ended in Mar. 2024 was KWD0.81. Therefore, Ali Alghanim Sons Automotive Co KSC's Price to Graham Number ratio for today is 1.36.

The historical rank and industry rank for Ali Alghanim Sons Automotive Co KSC's Graham Number or its related term are showing as below:

KUW:ALG' s Price-to-Graham-Number Range Over the Past 10 Years
Min: 1.22 Med: 1.37 Max: 1.51
Current: 1.36

During the past 3 years, the highest Price to Graham Number ratio of Ali Alghanim Sons Automotive Co KSC was 1.51. The lowest was 1.22. And the median was 1.37.

KUW:ALG's Price-to-Graham-Number is ranked worse than
57.25% of 959 companies
in the Vehicles & Parts industry
Industry Median: 1.19 vs KUW:ALG: 1.36

Graham Number is a combination of asset valuation and earnings power valuation. It is a very conservative way of valuing a stock.

Ali Alghanim Sons Automotive Co KSC Graham Number Historical Data

The historical data trend for Ali Alghanim Sons Automotive Co KSC's Graham Number can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

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Ali Alghanim Sons Automotive Co KSC Graham Number Chart

Ali Alghanim Sons Automotive Co KSC Annual Data

Trend

Dec21

Dec22

Dec23

Graham Number

0.52

0.65

0.84

Ali Alghanim Sons Automotive Co KSC Quarterly Data
	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24
Graham Number	Get a 7-Day Free Trial							0.67	0.75	0.77	0.84	0.81

Competitive Comparison of Ali Alghanim Sons Automotive Co KSC's Graham Number

For the Auto & Truck Dealerships subindustry, Ali Alghanim Sons Automotive Co KSC's Price-to-Graham-Number, along with its competitors' market caps and Price-to-Graham-Number data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

Ali Alghanim Sons Automotive Co KSC's Price-to-Graham-Number Distribution in the Vehicles & Parts Industry

For the Vehicles & Parts industry and Consumer Cyclical sector, Ali Alghanim Sons Automotive Co KSC's Price-to-Graham-Number distribution charts can be found below:

* The bar in red indicates where Ali Alghanim Sons Automotive Co KSC's Price-to-Graham-Number falls into.

Ali Alghanim Sons Automotive Co KSC Graham Number Calculation

Graham Number is a concept based on Ben Graham's conservative valuation of companies.

Ali Alghanim Sons Automotive Co KSC's Graham Number for the fiscal year that ended in Dec. 2023 is calculated as

	Graham Number
=	sqrt of (22.5	*	Tangible Book per Share	*	EPS without NRI)
=	sqrt of (22.5	*	0.301	*	0.104)
=	0.84

Ali Alghanim Sons Automotive Co KSC's Graham Number for the quarter that ended in Mar. 2024 is calculated as

	Graham Number
=	sqrt of (22.5	*	Tangible Book per Share	*	EPS without NRI (TTM))
=	sqrt of (22.5	*	0.278	*	0.105)
=	0.81

Ali Alghanim Sons Automotive Co KSC (KUW:ALG) Graham Number Explanation

Ben Graham actually did not publish a formula like this. But he wrote in The Intelligent Investor (1948 version) regarding to the criteria for purchases:

Current price should not be more than 15 times average earnings of the past three years.

Current price should not be more than 1.5 times the book value last reported. However, a multiplier of earnings below 15 could justify a correspondingly higher multiplier of assets. 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. (This figure corresponds to 15 times earnings and 1.5 times book value. It would admit an issue selling at only 9 times earnings and 2.5 times asset value, etc.)

Unlike valuation methods such as DCF or Discounted Earnings, the Graham number does not take growth into the valuation. Unlike the valuation methods based on book value alone, it takes into account the earnings power. Therefore, the Graham Number is a combination of asset valuation and earnings power valuation.

In general, the Graham number is a very conservative way of valuing a stock. It cannot be applied to companies with negative book values.

Ali Alghanim Sons Automotive Co KSC's Price to Graham number Ratio for today is calculated as

Price to Graham number	=	Share Price (Today)	/	Graham number (Q: Mar. 2024 )
	=	1.105	/	0.81
	=	1.36

Be Aware

Please keep these in mind:

1. Graham Number does not take growth into account. Therefore it underestimates the values of the companies that have good earnings growth. We feel that if the earnings per share grows more than 10% a year, Graham Number underestimates the value.
2. Graham Number punishes the companies that have temporarily low earnings. Therefore, an average of earnings makes more sense in the calculation of Graham Number.
3. Graham Numbers underestimates companies that are light with book.

Ali Alghanim Sons Automotive Co KSC Graham Number Related Terms

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Ali Alghanim Sons Automotive Co KSC (KUW:ALG) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Vehicles & Parts » Ali Alghanim Sons Automotive Co KSC (KUW:ALG) » Definitions » Graham Number

Comparable Companies

Traded in Other Exchanges

N/A

Address

Airport Road 55, P.O. Box 21540, Safat, Opposite Kaifan Telecommunication, Shuwaikh, KWT, 13076

Website

https://alg.com.kw

Ali Alghanim Sons Automotive Co KSC is engaged in the automotive business. The Primary Activities of the Company are selling and purchasing cars and spare parts, importing and exporting light and heavy vehicles and cars, renting cars, maintaining light & heavy vehicles and cars, trading auto spare parts, and renting equipment and their maintenance. The Group is divided into four main geographical segments which are the State of Kuwait, Iraq, Egypt and the United Arab Emirates. The majority is derived from Kuwait.