What is Global-Tech Advanced Innovations 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.
The historical rank and industry rank for Global-Tech Advanced Innovations's Graham Number or its related term are showing as below:
GAI's Price-to-Graham-Number is not ranked *
in the Semiconductors industry.
Industry Median: 1.95 * 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.
Global-Tech Advanced Innovations 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.
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Global-Tech Advanced Innovations Graham Number Chart
Competitive Comparison of Global-Tech Advanced Innovations's Graham Number
For the Semiconductor Equipment & Materials subindustry, Global-Tech Advanced Innovations'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.
Global-Tech Advanced Innovations's Price-to-Graham-Number Distribution in the Semiconductors Industry
For the Semiconductors industry and Technology sector, Global-Tech Advanced Innovations's Price-to-Graham-Number distribution charts can be found below:
* The bar in red indicates where Global-Tech Advanced Innovations's Price-to-Graham-Number falls into.
Global-Tech Advanced Innovations Graham Number Calculation
Graham Number is a concept based on Ben Graham's conservative valuation of companies.
* 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.
Global-Tech Advanced Innovations (NAS:GAI) 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.
Global-Tech Advanced Innovations's Price to Graham number Ratio for today is calculated as
Price to Graham number
=
Share Price (Today)
/
Graham number (Q: Sep. 2015 )
=
8.80
/
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.
Global-Tech Advanced Innovations Graham Number Related Terms
Thank you for viewing the detailed overview of Global-Tech Advanced Innovations's Graham Number provided by GuruFocus.com. Please click on the following links to see related term pages.
Global-Tech Advanced Innovations (Global-Tech Advanced Innovations) Business Description
Global-Tech Advanced Innovations Inc was organized as an international business company under the laws of the British Virgin Islands on May 2, 1991 and became a publicly traded entity on April 7, 1998. The Company was an exporter of small electrical appliances to North American and European markets. The Company produces complementary metal oxide semiconductor camera modules for sale to cellular phone manufacturers. The Company also comprises immaterial product lines and development programs. It continues to acquire new technologies in an effort to expand its capabilities in manufacturing finished products and components. Its patents are registered in various jurisdictions, including the United States, the United Kingdom, China and France. It competes with established companies in Hong Kong and China, a number of which have substantially greater technical, financial and marketing resources. Competition for contract manufacturing products is based on unit price, product quality and availability and service. Its operations and assets in China are subject to significant political, economic, legal and other uncertainties.
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