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 (2024-04-26), the stock price of Polycom is €11.07. Polycom's graham number for the quarter that ended in Jun. 2016 was €3.32. Therefore, Polycom's Price to Graham Number ratio for today is 3.34.
The historical rank and industry rank for Polycom's Graham Number or its related term are showing as below:
STU:PLY's Price-to-Graham-Number is not ranked *
in the Hardware industry.
Industry Median: 1.5 * Ranked among companies with meaningful Price-to-Graham-Number only.
Graham Number is a combination of asset valuation and earnings power valuation. It is a very conservative way of valuing a stock.
Polycom Graham Number Historical Data
The historical data trend for Polycom'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.
For the Communication Equipment subindustry, Polycom'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.
Polycom's Price-to-Graham-Number Distribution in the Hardware Industry
For the Hardware industry and Technology sector, Polycom's Price-to-Graham-Number distribution charts can be found below:
* The bar in red indicates where Polycom's Price-to-Graham-Number falls into.
Polycom Graham Number Calculation
Graham Number is a concept based on Ben Graham's conservative valuation of companies.
Polycom's Graham Number for the fiscal year that ended in Dec. 2015 is calculated as
* 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.
Polycom (STU:PLY) 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.
Polycom's Price to Graham number Ratio for today is calculated as
Price to Graham number
=
Share Price (Today)
/
Graham number (Q: Jun. 2016 )
=
11.07
/
3.32
=
3.34
* 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.
Polycom Graham Number Related Terms
Thank you for viewing the detailed overview of Polycom's Graham Number provided by GuruFocus.com. Please click on the following links to see related term pages.
Polycom Inc was incorporated in December 1990 in Delaware. The Company provides an open, standards-based unified communications and collaboration (UC&C) solutions for voice, video and content collaboration solutions. Its solutions are powered by the Polycom RealPresence Platform, comprehensive software infrastructure and rich application programming interfaces (APIs) that interoperate with a set of communication, business, mobile, and cloud applications and devices to deliver secure face-to-face video collaboration across different environments. The Company is engaged in helping organizations achieve new levels of teamwork, efficiency and productivity by unleashing the power of human collaboration. The Company sells its solutions through a high-touch sales model that leverages its network of channel partners, including distributors, value-added resellers, system integrators; communications services providers, and retailers. The Company serves in three geographical segments; Americas, EMEA and APAC. Its products and solutions are; UC Group Systems, which includes immersive telepresence, group video and group voice systems. UC Platform, which includes collaboration servers, virtualization management "distributed media optimization", resource management, recording and streaming, open API's and remote access technologies that constitute the RealPresence Platform, and UC Personal Devices, which includes desktop video devices and desktop voice products. It competes in the UC&C market with products and solutions that enable voice, video and content collaboration on-premises, across intranets, extranets, mobile devices, and the Internet via its customer premises-based RealPresence Platform, web-based social-collaboration business platforms, and video collaboration-as-a-service offerings delivered from the cloud. These competitors include but are not limited to Cisco Systems, Inc., Acano, Avaya Inc., Blue Jeans Networks, Inc., ClearOne Communications, Inc., Huawei Technologies Co., Ltd., Logitech International S.A./LifeSize, PexIP, Snom Technology Ag, Vidyo, Inc., Yamaha Corporation/Revolabs, Inc., Yealink, ZTE Corporation and others. Its products and services are subject to various federal, state, local, and foreign laws and regulations.
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