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Humana Graham Number

: $131.29 (As of Jun. 2022)
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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 (2022-08-15), the stock price of Humana is $499.255. Humana's graham number for the quarter that ended in Jun. 2022 was $131.29. Therefore, Humana's Price to Graham Number ratio for today is 3.80.

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

HUM' s Price-to-Graham-Number Range Over the Past 10 Years
Min: 0.65   Med: 1.9   Max: 6.81
Current: 3.8

During the past 13 years, the highest Price to Graham Number ratio of Humana was 6.81. The lowest was 0.65. And the median was 1.90.

HUM's Price-to-Graham-Number is ranked worse than
75% of 8 companies
in the Healthcare Plans industry
Industry Median: 2.47 vs HUM: 3.80

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


Humana Graham Number Historical Data

The historical data trend for Humana'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.

Humana Annual Data
Trend Dec12 Dec13 Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21
Graham Number
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 131.92 110.22 164.79 198.90 96.45

Humana Quarterly Data
Sep17 Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22
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 178.21 100.68 96.45 80.07 131.29

Competitive Comparison

For the Healthcare Plans subindustry, Humana'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.

   

Humana Graham Number Distribution

For the Healthcare Plans industry and Healthcare sector, Humana's Graham Number distribution charts can be found below:

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



Humana Graham Number Calculation

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

Humana's Graham Number for the fiscal year that ended in Dec. 2021 is calculated as

Graham Number
=sqrt of (22.5* Tangible Book per Share *EPS without NRI)
=sqrt of (22.5*18.237*22.67)
=96.45

Humana's Graham Number for the quarter that ended in Jun. 2022 is calculated as

Graham Number
=sqrt of (22.5*Tangible Book per Share*EPS without NRI (TTM))
=sqrt of (22.5*31.267*24.5)
=131.29

* 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.


Humana  (NYSE:HUM) 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.

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

Price to Graham number=Share Price (Today)/Graham number (Q: Jun. 2022 )
=499.255/131.29
=3.80

* 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.


Humana Graham Number Related Terms

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


Humana Business Description

Humana logo
Address
500 West Main Street, Louisville, KY, USA, 40202
Humana is one of the largest private health insurers in the U.S. with a focus on administering Medicare Advantage plans. The firm has built a niche specializing in government-sponsored programs, with nearly all its medical membership stemming from individual and group Medicare Advantage, Medicaid, and the military's Tricare program. The firm is also a leader in stand-alone prescription drug plans for seniors enrolled in traditional fee-for-service Medicare. Humana offers employer-based plans primarily for small businesses along with specialty insurance offerings such as dental, vision, and life. Beyond medical insurance, the company provides other healthcare services, including primary-care services, at-home services, and pharmacy benefit management.
Executives
Koeberlein Michael A. officer: SVP, Chief Accting Off & Cont. 500 W MAIN ST. LOUISVILLE KY 40202
Agwunobi, M.d. Andrew C. officer: Seg. President, Home Solutions HUMANA INC. 500 W MAIN STREET LOUISVILLE KY 40202
Feinberg David T director 12525 CHADRON AVENUE HAWTHORNE CA 90250
Schick Susan D. officer: Seg Pres. Grp. & Military Bus. 500 W. MAIN ST. LOUISVILLE KY 40202
Mesquita Jorge S. director C/O KRAFT FOODS INC. THREE LAKES DRIVE NORTHFIELD IL 60093
Klevorn Marcy S director ONE AMERICAN ROAD DEARBORN MI 48126
Bono Raquel C. director 500 W MAIN ST. LOUISVILLE KY 40202
Frederick Wayne A.i. director 500 W MAIN ST. LOUISVILLE KY 40202
Garratt John W director 100 MISSION RIDGE GOODLETTSVILLE TN 37072
Katz Karen director
Diamond Susan M officer: Segment President, Home Bus. 500 W MAIN ST. LOUISVILLE KY 40202
Shrank William H officer: Chief Medical Officer 500 WEST MAIN ST LOUISVILLE KY 40202
Ventura Joseph C officer: Chief Legal Officer & Corp Sec 500 W MAIN STREET LOUISVILLE KY 40202
Agrawal Vishal officer: Chief Strategy Officer 500 W MAIN ST LOUISVILLE KY 40202
Cox Heather officer: Chief Digital & Analytics Off. 804 CARNEGIE CENTER PRINCETON NJ 08540

Humana Headlines

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