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.
The historical rank and industry rank for Surgical Care Affiliates's Graham Number or its related term are showing as below:
SCAI's Price-to-Graham-Number is not ranked *
in the Healthcare Providers & Services industry.
Industry Median: 2.115 * Ranked among companies with meaningful Price-to-Graham-Number only.
Graham Number is a combination of asset valuation and earnings power valuation. It is a very conservative way of valuing a stock.
Surgical Care Affiliates Graham Number Historical Data
* 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.
Competitive Comparison of Surgical Care Affiliates's Graham Number
For the Medical Care Facilities subindustry, Surgical Care Affiliates'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.
Surgical Care Affiliates's Price-to-Graham-Number Distribution in the Healthcare Providers & Services Industry
For the Healthcare Providers & Services industry and Healthcare sector, Surgical Care Affiliates's Price-to-Graham-Number distribution charts can be found below:
* The bar in red indicates where Surgical Care Affiliates's Price-to-Graham-Number falls into.
Surgical Care Affiliates Graham Number Calculation
Graham Number is a concept based on Ben Graham's conservative valuation of companies.
Surgical Care Affiliates's Graham Number for the fiscal year that ended in Dec. 2016 is calculated as
* 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.
Surgical Care Affiliates (NAS:SCAI) 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.
Surgical Care Affiliates's Price to Graham number Ratio for today is calculated as
Price to Graham number
=
Share Price (Today)
/
Graham number (Q: Dec. 2016 )
=
55.87
/
N/A
=
N/A
* 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.
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.
Surgical Care Affiliates Graham Number Related Terms
Thank you for viewing the detailed overview of Surgical Care Affiliates's Graham Number provided by GuruFocus.com. Please click on the following links to see related term pages.
Surgical Care Affiliates (Surgical Care Affiliates) Business Description
Surgical Care Affiliates Inc was incorporated on March 23, 2007. It is a provider of solutions to physicians, health plans and health systems to optimize surgical care. It operates surgical facilities in the United States, which includes 185 ambulatory surgery centers ("ASCs") and seven surgical hospitals. Its business model is focused on building strategic relationships with physicians, health plans and health systems to invest in, develop and optimize facilities in an aligned economic model that enables access to high-quality care at lower cost. It owns and operates facilities in partnership with 45 health systems and approximately 2,800 physician partners. It has six operating segments, which are aggregated into one reportable segment. Its six operating segments are generally organized geographically. Its operations consist of ownership and management of ASCs and surgical hospitals. Its affiliated facilities provide the space, equipment and medical support staff necessary for physicians to perform non-emergency surgical procedures. Its typical ASC is a freestanding facility with fully-equipped operating and procedure rooms and ancillary areas for reception, preparation, recovery and administration. Its surgical hospitals provide medical services similar to those provided by ASCs and can also accommodate more complex procedures, some of which require patients to stay overnight. It faces competition from other providers of ambulatory surgical care in developing ASC and surgical hospital joint ventures, acquiring existing facilities, attracting patients and negotiating commercial health plan contract pricing. It is subject to various federal, state and local laws and regulations relating to the protection of the environment and human health and safety, including those governing the management and disposal of hazardous substances and wastes, the cleanup of contaminated sites and the maintenance of a safe workplace.
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