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 Sompo Holdings is 円3063.00. Sompo Holdings's graham number for the quarter that ended in Dec. 2023 was 円4,599.85. Therefore, Sompo Holdings's Price to Graham Number ratio for today is 0.67.
The historical rank and industry rank for Sompo Holdings's Graham Number or its related term are showing as below:
TSE:8630'
s Price-to-Graham-Number Range Over the Past 10 Years
Min: 0.5 Med: 0.69 Max: 3.76
Current: 0.67
During the past 13 years, the highest Price to Graham Number ratio of Sompo Holdings was 3.76. The lowest was 0.50. And the median was 0.69.
TSE:8630's Price-to-Graham-Number is ranked better than 65.41% of 399
companies
in the Insurance industry
Industry Median: 0.86
vs TSE:8630: 0.67
Graham Number is a combination of asset valuation and earnings power valuation. It is a very conservative way of valuing a stock.
Sompo Holdings Graham Number Historical Data
The historical data trend for Sompo Holdings'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.
Competitive Comparison of Sompo Holdings's Graham Number
For the Insurance - Property & Casualty subindustry, Sompo Holdings'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.
Sompo Holdings's Price-to-Graham-Number Distribution in the Insurance Industry
For the Insurance industry and Financial Services sector, Sompo Holdings's Price-to-Graham-Number distribution charts can be found below:
* The bar in red indicates where Sompo Holdings's Price-to-Graham-Number falls into.
Sompo Holdings Graham Number Calculation
Graham Number is a concept based on Ben Graham's conservative valuation of companies.
Sompo Holdings's Graham Number for the fiscal year that ended in Mar. 2023 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.
Sompo Holdings (TSE:8630) 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.
Sompo Holdings's Price to Graham number Ratio for today is calculated as
Price to Graham number
=
Share Price (Today)
/
Graham number (Q: Dec. 2023 )
=
3063.00
/
4,599.85
=
0.67
* 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.
Sompo Holdings Graham Number Related Terms
Thank you for viewing the detailed overview of Sompo Holdings's Graham Number provided by GuruFocus.com. Please click on the following links to see related term pages.
Sompo Holdings was formed in 2010 after the merger of the former Sompo Japan and Nipponkoa Insurance. The name Sompo, which literally just means "nonlife insurance" in Japanese, was adopted as a common brand in 2001 for a planned three-way merger of Yasuda Fire, Nissan Fire, and Taisei Fire, although that deal had to be reworked after Taisei Fire's sudden bankruptcy from Sept. 11 losses. In the last few years Sompo has worked to integrate the former Nipponkoa, which before the merger had been somewhat of an industry laggard, to improve overall efficiency. Although Nissan Fire is one of its predecessor firms, in reality Sompo's development has been mainly driven by the former Yasuda Fire and the group has balanced ties to most of Japan's automakers, rather than focusing on Nissan.
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