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General Electric Co Graham Number

: $11.42 (As of Sep. 2021)
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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 (2021-12-01), the stock price of General Electric Co is $94.95. General Electric Co's graham number for the quarter that ended in Sep. 2021 was $11.42. Therefore, General Electric Co's Price to Graham Number ratio for today is 8.31.

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

NYSE:GE' s Price-to-Graham-Number Range Over the Past 10 Years
Min: 1.14   Med: 2.79   Max: 18.72
Current: 8.36

1.14
18.72

During the past 13 years, the highest Price to Graham Number ratio of General Electric Co was 18.72. The lowest was 1.14. And the median was 2.79.

NYSE:GE's Price-to-Graham-Number is ranked lower than
95% of the 1984 Companies
in the Industrial Products industry.

( Industry Median: 1.62 vs. NYSE:GE: 8.36 )

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


General Electric Co Graham Number Historical Data

The historical data trend for General Electric Co'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.

General Electric Co Annual Data
Trend Dec11 Dec12 Dec13 Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20
Graham Number
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only - - - - 4.91

General Electric Co Quarterly Data
Dec16 Mar17 Jun17 Sep17 Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21
Graham Number 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 Premium Member Only Premium Member Only Premium Member Only - 5.31 - - 11.42

Competitive Comparison

For the Specialty Industrial Machinery subindustry, General Electric Co's Graham Number, along with its competitors' market caps and 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.

   

General Electric Co Graham Number Distribution

For the Industrial Products industry and Industrials sector, General Electric Co's Graham Number distribution charts can be found below:

* The bar in red indicates where General Electric Co's Graham Number falls into.



General Electric Co Graham Number Calculation

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

General Electric Co's Graham Number for the fiscal year that ended in Dec. 2020 is calculated as

Graham Number
=sqrt of (22.5* Tangible Book per Share *EPS without NRI)
=sqrt of (22.5*0.227*4.72)
=4.91

General Electric Co's Graham Number for the quarter that ended in Sep. 2021 is calculated as

Graham Number
=sqrt of (22.5*Tangible Book per Share*EPS without NRI (TTM))
=sqrt of (22.5*2.687*2.158)
=11.42

* 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.


General Electric Co  (NYSE:GE) 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.

General Electric Co's Price to Graham number Ratio for today is calculated as

Price to Graham number=Share Price (Today)/Graham number (Q: Sep. 2021 )
=94.95/11.42
=8.31

* 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.


General Electric Co Graham Number Related Terms

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


General Electric Co Business Description

General Electric Co logo
Industry
Industrials » Industrial Products NAICS : 335312 SIC : 3621
Address
5 Necco Street, Boston, MA, USA, 02210
GE was formed through the combination of two companies in 1892, including one with historical ties to American inventor Thomas Edison. Today, GE is a global leader in air travel, precision health, and in the energy transition. The company is known for its differentiated technology and its massive industrial installed base of equipment sprawled throughout the world. That installed base most notably includes aerospace engines, gas and steam turbines, onshore and offshore wind turbines, as well as medical diagnostic and mobile equipment. GE earns most of its profits on the service revenue of that equipment, which is generally higher-margin. The company is led by former Danaher alum Larry Culp who is leading a multi-year turnaround of the storied conglomerate based on Lean principles.
Executives
Horton Thomas W director 4333 AMON CARTER BLVD. FORTH WORTH TX 76155
Rosput Paula G director 605 HILLSIDE DRIVE EAST SEATTLE WA 98112
Trian Fund Management, L.p. director 280 PARK AVENUE 41ST FLOOR NEW YORK NY 10017
Garden Edward P director 280 PARK AVE 41ST FL NEW YORK NY 10017
Lavizzo-mourey Risa J director GENERAL ELECTRIC COMPANY 5 NECCO STREET BOSTON MA 02210
Tisch James S director 667 MADISON AVE NEW YORK NY 10021
Bazin Sebastien director 5 NECCO STREET 5 NECCO STREET BOSTON MA 02210
Dsouza Francisco director 500 GLENPOINTE CENTRE W TEANECK NJ 07666
Seidman Leslie director 7 WORLD TRADE CENTER 250 GREENWICH STREET NEW YORK NY 10007
Lesjak Catherine A director 1501 PAGE MILL RD PALO ALTO CA 94304
Carter Ashton B director C/O DELTA AIR LINES, INC. P.O. BOX 20574, DEPT. 981 ATLANTA GA 30320
Pecresse Jerome officer: Senior Vice President 5 NECCO STREET BOSTON MA 02210
Murphy Kieran Pius officer: Senior Vice President THE GROVE CENTRE,WHITE LION ROAD LITTLE CHALFONT X0 HP7 9LL
Joyce David Leon officer: Vice Chairman GENERAL ELECTRIC COMPANY 5 NECCO STREET BOSTON MA 02210
Stokes Russell officer: Senior Vice President 5 NECCO STREET BOSTON MA 02210

General Electric Co Headlines

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