Safeway (FRA:SWY) Graham Number : €8.50 (As of Sep. 2014)

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What is Safeway 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 (2024-05-28), the stock price of Safeway is €31.02. Safeway's graham number for the quarter that ended in Sep. 2014 was €8.50. Therefore, Safeway's Price to Graham Number ratio for today is 3.65.

The historical rank and industry rank for Safeway's Graham Number or its related term are showing as below:

During the past 13 years, the highest Price to Graham Number ratio of Safeway was 28.89. The lowest was 0.00. And the median was 1.69.

FRA:SWY's Price-to-Graham-Number is not ranked ^*
in the Retail - Defensive industry.
Industry Median: 1.27
* 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.

Safeway Graham Number Historical Data

The historical data trend for Safeway'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.

* Premium members only.

Safeway Graham Number Chart

Safeway Annual Data

Trend

Dec04

Dec05

Dec06

Dec07

Dec08

Dec09

Dec10

Dec11

Dec12

Dec13

Graham Number

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15.48

13.51

12.35

15.89

Safeway Quarterly Data
	Dec09	Mar10	Jun10	Sep10	Dec10	Mar11	Jun11	Sep11	Dec11	Mar12	Jun12	Sep12	Dec12	Mar13	Jun13	Sep13	Dec13	Mar14	Jun14	Sep14
Graham Number	Get a 7-Day Free Trial															14.29	16.16	10.14	11.11	8.50

Competitive Comparison of Safeway's Graham Number

For the Grocery Stores subindustry, Safeway'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.

Safeway's Price-to-Graham-Number Distribution in the Retail - Defensive Industry

For the Retail - Defensive industry and Consumer Defensive sector, Safeway's Price-to-Graham-Number distribution charts can be found below:

* The bar in red indicates where Safeway's Price-to-Graham-Number falls into.

Safeway Graham Number Calculation

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

Safeway's Graham Number for the fiscal year that ended in Dec. 2013 is calculated as

	Graham Number
=	sqrt of (22.5	*	Tangible Book per Share	*	EPS without NRI)
=	sqrt of (22.5	*	16.187	*	0.693)
=	15.89

Safeway's Graham Number for the quarter that ended in Sep. 2014 is calculated as

	Graham Number
=	sqrt of (22.5	*	Tangible Book per Share	*	EPS without NRI (TTM))
=	sqrt of (22.5	*	17.532	*	0.183)
=	8.50

Safeway (FRA:SWY) 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.

Safeway's Price to Graham number Ratio for today is calculated as

Price to Graham number	=	Share Price (Today)	/	Graham number (Q: Sep. 2014 )
	=	31.02	/	8.50
	=	3.65

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.

Safeway Graham Number Related Terms

Thank you for viewing the detailed overview of Safeway's Graham Number provided by GuruFocus.com. Please click on the following links to see related term pages.

Safeway (FRA:SWY) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Defensive » Retail - Defensive » Safeway Inc (FRA:SWY) » Definitions » Graham Number

Comparable Companies

Traded in Other Exchanges

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Address

Website

http://www.safeway.com

Safeway Inc was incorporated in the state of Delaware in July 1986 as SSI Holdings Corporation and, thereafter, its name was changed to Safeway Stores, Incorporated. In February 1990, the Company changed its name to Safeway Inc. The Company is a food and drug retailers in the United States, with 1,335 stores at year-end 2013. The Company's U.S. retail operations are located principally in California, Hawaii, Oregon, Washington, Alaska, Colorado, Arizona, Texas and the Mid-Atlantic region. The Company also has a network of distribution, manufacturing and food-processing facilities. The Company retail business operates into seven geographic retail operating segments; Denver, Eastern, Northern California, Phoenix, Northwest, Texas and Southern California. In all geographical retail operating segments, it operates one store format, where each store offers the same general mix of products with similar pricing to similar categories of customers. The Company does not operate supercenters, warehouse formats, combination clothing/grocery stores or discount stores. It owns and operates GroceryWorks.com Operating Company, LLC ("GroceryWorks"), an online grocery channel doing business under the names Safeway.com and Vons.com. Safeway's stores provide grocery items tailored to local preferences. Its stores offer a selection of food and general merchandise and feature a variety of specialty departments such as bakery, delicatessen, floral and pharmacy. In addition, its stores offer Starbucks coffee shops and adjacent fuel centers. The Company also owns more than 300 other trademarks registered and/or pending in the United States Patent and Trademark Office and other jurisdictions, including trademarks for its product and services such as Safeway, Safeway SELECT, Rancher's Reserve, O Organics, Lucerne, Primo Taglio, Eating Right, mom to mom, waterfront BISTRO, Bright Green, Pantry Essentials, Open Nature, Refreshe, Snack Artist, Signature CafÃ©, Priority, just for U, My Simple Nutrition, Ingredients for Life, and other trademarks such as Pak'N Save Foods, Vons, Pavilions, Randalls, Tom Thumb, and Carrs Quality Centers. Blackhawk, a subsidiary of Safeway, provides third-party gift cards, prepaid cards, telecom cards and sports and entertainment cards to a group of top North American retailers for sale to retail customers. The competitive factors that affect the Company's business are location, quality, price, condition of assets, marketing and promotional strategies, service and consumer loyalty to other brands and stores. It faces intense competition from traditional grocery retailers, non-traditional competitors such as supercenters and club stores, as well as from specialty supermarkets, drug stores, dollar stores, convenience stores and restaurants. The Company's compliance with the federal, state, local and foreign laws and regulations have been adopted regulating the discharge of materials into the environment or otherwise related to the p

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