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Graco Graham Number

: $18.63 (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 (2022-01-20), the stock price of Graco is $72.91. Graco's graham number for the quarter that ended in Sep. 2021 was $18.63. Therefore, Graco's Price to Graham Number ratio for today is 3.91.

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

NYSE:GGG' s Price-to-Graham-Number Range Over the Past 10 Years
Min: 0.7   Med: 3.23   Max: 19.09
Current: 3.93

0.7
19.09

During the past 13 years, the highest Price to Graham Number ratio of Graco was 19.09. The lowest was 0.70. And the median was 3.23.

NYSE:GGG's Price-to-Graham-Number is ranked lower than
84% of the 2003 Companies
in the Industrial Products industry.

( Industry Median: 1.61 vs. NYSE:GGG: 3.93 )

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


Graco Graham Number Historical Data

The historical data trend for Graco'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.

Graco 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 2.08 7.07 8.81 12.18 14.07

Graco 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 12.45 14.04 15.72 18.08 18.63

Competitive Comparison

For the Specialty Industrial Machinery subindustry, Graco'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.

   

Graco Graham Number Distribution

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

* The bar in red indicates where Graco's Graham Number falls into.



Graco Graham Number Calculation

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

Graco'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*4.585*1.92)
=14.07

Graco'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*6.195*2.49)
=18.63

* 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.


Graco  (NYSE:GGG) 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.

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

Price to Graham number=Share Price (Today)/Graham number (Q: Sep. 2021 )
=72.91/18.63
=3.91

* 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.


Graco Graham Number Related Terms

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


Graco Business Description

Graco logo
Industry
Industrials » Industrial Products NAICS : 333249 SIC : 3561
Traded in Other Exchanges
Address
88-11th Avenue Northeast, Minneapolis, MN, USA, 55413
Graco manufactures equipment used for managing fluids, coatings, and adhesives, specializing in difficult-to-handle materials. Graco's business is organized into three segments: industrial, process, and contractor. The Minnesota-based firm serves a wide range of end markets, including industrial, automotive, and construction, and its broad array of products include pumps, valves, meters, sprayers, and equipment used to apply coatings, sealants, and adhesives. The firm generated roughly $1.7 billion in sales and $410 million in operating income in 2020.
Executives
Zumbolo Brian J officer: President, Asia Pacific PO BOX 1441 MINNEAPOLIS MN 55440-1441
Gallivan Karen Park officer: Executive Vice President P O BOX 1441 MINNEAPOLIS MN 55440-1441
Wheeler Kevin J. director A. O. SMITH CORPORATION 500 TENNESSEE WALTZ PARKWAY ASHLAND CITY TN 37015
Van Sant R William director PO BOX 1441 MINNEAPOLIS MN 55440-1441
Eugster Jack W director PO BOX 1441 MINNEAPOLIS MN 55440-1441
Etchart Eric director ROOM F, 22F CROSS REGION PLAZA 899 LINGLING ROAD SHANGHAI F4 200030
White Emily director C/O LULULEMON ATHLETICA INC. 1818 CORNWALL AVENUE VANCOUVER A1 V6J 1C7
Morfitt Martha A M director P.O. BOX 1441 MINNEAPOLIS MN 55440-1441
Mitau Lee R director P O BOX 1441 MINNEAPOLIS MN 55440-1441
Feragen Jody H director 1 HORMEL PLACE AUSTIN TX 55912
Gilligan J Kevin director P O BOX 1441 MINNEAPOLIS MN 55440-1441
White Timothy R officer: President, White Knight, QED 88 11TH AVENUE NE MINNEAPOLIS MN 55413
Johnson Dale D officer: President, Worldwide CED P.O. BOX 1441 MINNEAPOLIS MN 5440-1441
Chambers Caroline M officer: President, EMEA PO BOX 1441 MINNEAPOLIS MN 55440-1441
Wordell Angela F officer: EVP, Operations, President ONG 88 11TH AVENUE NE MINNEAPOLIS MN 55413

Graco Headlines

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