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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 (2024-03-28), the stock price of Penns Woods Bancorp is $19.41. Penns Woods Bancorp's graham number for the quarter that ended in Dec. 2023 was $35.09. Therefore, Penns Woods Bancorp's Price to Graham Number ratio for today is 0.55.
The historical rank and industry rank for Penns Woods Bancorp's Graham Number or its related term are showing as below:
During the past 13 years, the highest Price to Graham Number ratio of Penns Woods Bancorp was 1.35. The lowest was 0.54. And the median was 0.99.
Graham Number is a combination of asset valuation and earnings power valuation. It is a very conservative way of valuing a stock.
The historical data trend for Penns Woods Bancorp'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.
For the Banks - Regional subindustry, Penns Woods Bancorp'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.
For the Banks industry and Financial Services sector, Penns Woods Bancorp's Price-to-Graham-Number distribution charts can be found below:
* The bar in red indicates where Penns Woods Bancorp's Price-to-Graham-Number falls into.
Graham Number is a concept based on Ben Graham's conservative valuation of companies.
Penns Woods Bancorp'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 | * | 23.292 | * | 2.36) |
= | 35.17 |
Penns Woods Bancorp's Graham Number for the quarter that ended in Dec. 2023 is calculated as
Graham Number | |||||
= | sqrt of (22.5 | * | Tangible Book per Share | * | EPS without NRI (TTM)) |
= | sqrt of (22.5 | * | 23.292 | * | 2.35) |
= | 35.09 |
* 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.
Penns Woods Bancorp (NAS:PWOD) 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.
Penns Woods Bancorp's Price to Graham number Ratio for today is calculated as
Price to Graham number | = | Share Price (Today) | / | Graham number (Q: Dec. 2023 ) |
= | 19.41 | / | 35.09 | |
= | 0.55 |
* 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.
Thank you for viewing the detailed overview of Penns Woods Bancorp's Graham Number provided by GuruFocus.com. Please click on the following links to see related term pages.
Charles E. Kranich | director | 1025 GREENBRIAR DRIVE, STATE COLLEGE PA 16801-6936 |
William Edwards | director | 885 SHADE HOLLOW ROAD, MILL HALL PA 17751 |
Cameron Kephart | director | 300 MARKET STREET, P.O. BOX 967, WILLIAMSPORT PA 17703 |
Daniel K. Brewer | director | 23 LONG VIEW DRIVE, BLOOMSBURG PA 17815 |
Richard A Grafmyre | director, officer: President and CEO | 115 SKYWARD DRIVE, DANVILLE PA 17821 |
Brian L Knepp | officer: VP of Finance/Asst. Secretary | ONE STRAWBERRY LANE, MIDDLEBURG PA 17842 |
Jack W. Jones | officer: CBO | 300 MARKET STREET, P. O. BOX 967, WILLIAMSPORT PA 17703 |
Robert Neher | officer: President Luzerne Bank | 300 MARKET STREET, P.O. BOX 967, WILLIAMSPORT PA 17703 |
Furey James M Ii | director | 299 LEHMAN DRIVE, COGAN STATION PA 17728 |
Nackley John G Sr | director | 559 LAKESIDE DRIVE, HARVEYS LAKE PA 18618 |
Joseph E Kluger | director | 1768 PENNS CROSSING, ALLENTOWN PA 18104 |
D Michael Hawbaker | director | 502 STONECLIFFE PLACE, PORT MATILDA PA 16870 |
Jill Fortinsky Schwartz | director | 857 NANDY DRIVE, KINGSTON PA 18704 |
Michelle M Karas | officer: Chief Operating Officer | C/O PENNS WOODS BANCORP, INC., 300 MARKET STREET, WILLIAMSPORT PA 17703 |
Robert Q. Miller | director | 534 MUNRO ROAD, MILL HALL PA 17751 |
From GuruFocus
By Marketwired 04-06-2020
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