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GEA Group AG Graham Number

: $5.73 (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 (2021-11-28), the stock price of GEA Group AG is $50.75. GEA Group AG's graham number for the quarter that ended in Sep. 2021 was $5.73. Therefore, GEA Group AG's Price to Graham Number ratio for today is 8.85.

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

OTCPK:GEAGF' s Price-to-Graham-Number Range Over the Past 10 Years
Min: 2.89   Med: 4.96   Max: 25.97
Current: 9.03

2.89
25.97

During the past 13 years, the highest Price to Graham Number ratio of GEA Group AG was 25.97. The lowest was 2.89. And the median was 4.96.

OTCPK:GEAGF's Price-to-Graham-Number is ranked lower than
74% of the 156 Companies
in the Industrial Products industry.

( Industry Median: 1.83 vs. OTCPK:GEAGF: 9.03 )

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


GEA Group AG Graham Number Historical Data

The historical data trend for GEA Group AG'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.

GEA Group AG 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 13.90 7.03 4.67 - 2.03

GEA Group AG 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 - 1.95 4.45 3.74 5.73

Competitive Comparison

For the Specialty Industrial Machinery subindustry, GEA Group AG'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.

   

GEA Group AG Graham Number Distribution

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

* The bar in red indicates where GEA Group AG's Graham Number falls into.



GEA Group AG Graham Number Calculation

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

GEA Group AG'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*0.25*0.73)
=2.03

GEA Group AG'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*1.167*1.252)
=5.73

* 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.


GEA Group AG  (OTCPK:GEAGF) 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.

GEA Group AG's Price to Graham number Ratio for today is calculated as

Price to Graham number=Share Price (Today)/Graham number (Q: Sep. 2021 )
=50.75/5.73
=8.85

* 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.


GEA Group AG Graham Number Related Terms

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


GEA Group AG Business Description

GEA Group AG logo
Industry
Industrials » Industrial Products NAICS : 333999 SIC : 3559
Traded in Other Exchanges
Address
Peter-Muller-Strasse 12, Dusseldorf, DEU, 40468
GEA is an expert in food processing. It manufactures equipment for separation, fluid handling, dairy processing, and dairy farming, and designs and constructs process lines or entire plants for customers. Based in Germany, the company is a global market leader, with number-one or number-two positions in its markets. Its separators are used in hundreds of different, tailored applications. Every fourth litre of milk, third instant coffee line, third chicken nugget, and second litre of beer globally is processed using the company's specialised equipment.
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