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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 (2024-05-05), the stock price of AeroGrow International is $3.21. AeroGrow International's graham number for the quarter that ended in Dec. 2020 was $1.97. Therefore, AeroGrow International's Price to Graham Number ratio for today is 1.63.
The historical rank and industry rank for AeroGrow International's Graham Number or its related term are showing as below:
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 AeroGrow International'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.
AeroGrow International Annual Data | |||||||||||||||||||||
Trend | Mar11 | Mar12 | Mar13 | Mar14 | Mar15 | Mar16 | Mar17 | Mar18 | Mar19 | Mar20 | |||||||||||
Graham Number | Get a 7-Day Free Trial | - | - | 0.16 | - | 0.13 |
AeroGrow International Quarterly Data | ||||||||||||||||||||
Mar16 | Jun16 | Sep16 | Dec16 | Mar17 | Jun17 | Sep17 | Dec17 | Mar18 | Jun18 | Sep18 | Dec18 | Mar19 | Jun19 | Sep19 | Dec19 | Mar20 | Jun20 | Sep20 | Dec20 | |
Graham Number | Get a 7-Day Free Trial | - | 0.13 | 1.06 | 1.40 | 1.97 |
For the Home Improvement Retail subindustry, AeroGrow International'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 Retail - Cyclical industry and Consumer Cyclical sector, AeroGrow International's Price-to-Graham-Number distribution charts can be found below:
* The bar in red indicates where AeroGrow International's Price-to-Graham-Number falls into.
Graham Number is a concept based on Ben Graham's conservative valuation of companies.
AeroGrow International's Graham Number for the fiscal year that ended in Mar. 2020 is calculated as
Graham Number | |||||
= | sqrt of (22.5 | * | Tangible Book per Share | * | EPS without NRI) |
= | sqrt of (22.5 | * | 0.364 | * | 0.002) |
= | 0.13 |
AeroGrow International's Graham Number for the quarter that ended in Dec. 2020 is calculated as
Graham Number | |||||
= | sqrt of (22.5 | * | Tangible Book per Share | * | EPS without NRI (TTM)) |
= | sqrt of (22.5 | * | 0.611 | * | 0.282) |
= | 1.97 |
* 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.
AeroGrow International (OTCPK:AERO) 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.
AeroGrow International's Price to Graham number Ratio for today is calculated as
Price to Graham number | = | Share Price (Today) | / | Graham number (Q: Dec. 2020 ) |
= | 3.21 | / | 1.97 | |
= | 1.63 |
* 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.
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 AeroGrow International's Graham Number provided by GuruFocus.com. Please click on the following links to see related term pages.
John K Thompson | officer: EVP Marketing | 6075 LONGBOW DR. SUITE 200 BOULDER CO 80301 |
J Michael Wolfe | officer: President and CEO | 6075 LONGBOW DR. SUITE 200 BOULDER CO 80301 |
Jack Jonas Walker | director | 2105 11TH STREET BOULDER CO 80302 |
Harding Wayne Edward Iii | director | 6075 LONGBOW DRIVE STE 200 BOULDER CO 80301 |
Smg Growing Media, Inc. | 10 percent owner | 14111 SCOTTSLAWN ROAD MARYSVILLE OH 43041 |
Grey H Gibbs | officer: SVP-Finance and Accounting | 3566 LARKSPUR CT. LONGMONT CO 80503 |
E Jeffrey Peierls | 10 percent owner | 73 SOUTH HOLMAN WAY, GOLDEN CO 80401 |
Michael S Barish | director | 2401 EAST SECOND AVENUE, SUITE 400, DENVER CO 80206 |
Scotts Miracle-gro Co | 10 percent owner | 14111 SCOTTSLAWN ROAD N/A MARYSVILLE OH 43041 |
Lazarus Investment Partners Lllp | 10 percent owner | C/O IBEX INVESTORS LLC, 260 NORTH JOSEPHINE STREET, SUITE 300, DENVER CO 80206 |
Justin B Borus | 10 percent owner | 260 N. JOSEPHINE STREET, SUITE 300, DENVER CO 80206 |
Lazarus Management Co Llc | 10 percent owner | 260 N. JOSEPHINE STREET, SUITE 300, DENVER CO 80206 |
Brian E Peierls | 10 percent owner | 7808 HARVESTMAN COVE, AUSTIN TX 78731 |
Christopher Hagedorn | director | 14111 SCOTTSLAWN ROAD, MARYSVILLE OH 43041 |
H Macgregor Clarke | director, officer: Chief Financial Officer | 6075 LONGBOW DR. SUITE 200 BOULDER CO 80301 |
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