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Grainger (LSE:GRI) Graham Number : £1.68 (As of Sep. 2024)


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What is Grainger 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 (2024-12-15), the stock price of Grainger is £2.305. Grainger's graham number for the quarter that ended in Sep. 2024 was £1.68. Therefore, Grainger's Price to Graham Number ratio for today is 1.37.

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

LSE:GRI' s Price-to-Graham-Number Range Over the Past 10 Years
Min: 1.12   Med: 1.73   Max: 2.4
Current: 1.37

During the past 13 years, the highest Price to Graham Number ratio of Grainger was 2.40. The lowest was 1.12. And the median was 1.73.

LSE:GRI's Price-to-Graham-Number is ranked worse than
73.44% of 1107 companies
in the Real Estate industry
Industry Median: 0.83 vs LSE:GRI: 1.37

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


Grainger Graham Number Historical Data

The historical data trend for Grainger'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.

Grainger Graham Number Chart

Grainger Annual Data
Trend Sep15 Sep16 Sep17 Sep18 Sep19 Sep20 Sep21 Sep22 Sep23 Sep24
Graham Number
Get a 7-Day Free Trial Premium Member Only Premium Member Only 1.24 1.28 1.36 1.57 1.68

Grainger Semi-Annual Data
Mar15 Sep15 Mar16 Sep16 Mar17 Sep17 Mar18 Sep18 Mar19 Sep19 Mar20 Sep20 Mar21 Sep21 Mar22 Sep22 Mar23 Sep23 Mar24 Sep24
Graham Number Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 1.36 1.53 1.57 1.60 1.68

Competitive Comparison of Grainger's Graham Number

For the Real Estate Services subindustry, Grainger'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.


Grainger's Price-to-Graham-Number Distribution in the Real Estate Industry

For the Real Estate industry and Real Estate sector, Grainger's Price-to-Graham-Number distribution charts can be found below:

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



Grainger Graham Number Calculation

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

Grainger's Graham Number for the fiscal year that ended in Sep. 2024 is calculated as

Graham Number
=sqrt of (22.5* Tangible Book per Share *EPS without NRI)
=sqrt of (22.5*2.563*0.049)
=1.68

Grainger's Graham Number for the quarter that ended in Sep. 2024 is calculated as

Graham Number
=sqrt of (22.5*Tangible Book per Share*EPS without NRI (TTM))
=sqrt of (22.5*2.563*0.049)
=1.68

* 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.


Grainger  (LSE:GRI) 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.

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

Price to Graham number=Share Price (Today)/Graham number (Q: Sep. 2024 )
=2.305/1.68
=1.37

* 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.


Grainger Graham Number Related Terms

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


Grainger Business Description

Traded in Other Exchanges
Address
St James\' Boulevard, Citygate, Newcastle upon Tyne, GBR, NE1 4JE
Grainger PLC owns, leases, and manages residential properties. The company derives the vast majority of its revenue through property sales and rental income. The business categorizes its operations into U.K. residential, retirement solutions, fund and third-party management, the U.K. and European development, German residential, and others. U.K. Residential represents the bulk of the group's revenue, with retirement solutions and the UK and European development also contributing a substantial portion. The company also offers residential fund- and asset management services. The two segments for the company are PRS which derives maximum revenue, and Reversionary.