Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (2) | Ignore Thread Prev | Next
Author: blesto Big red star, 1000 posts Global Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 295  
Subject: GNVR for V Date: 1/27/2013 8:16 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 2
GNVR = my Graham Number Valuation Range

You can look up the Graham Number in the Fool's wiki. It's a formula derived from Graham's writings. This is not what I think the current stock price should be but if the price were to fall to these levels I would be stupid not to buy shares. Graham (as per my understanding) was always lookng for companies the Market has mispriced and if the price was below his valuations he was picking up shares.
This is also not to say that the current price is to high. Let the trend be your friend. I'm just conducting an exercise and I happen to be using V at this time.


Fair Value = Square Root of (EPS * Book Value * 22.5)

Some say you should use the Tangible Book Value. I do, along with the Normalized EPS thus giving me a range GNVR.
I sometimes mix it up some more.

Using current Fool CAPS Stats data:
EPS = 2.22
BV = 34.09
First Graham Number = 41.08

Using Scottrade Data (they're slow with updated numbers so this data is good as of Sep 30, 2012 and I expect an update soon)
EPS = 1.87
Normalized EPS = 6.35
Book Value = 41.30
Tang.Book Value = 6.77
Mixing it up to get four different Graham Numbers
41.69 used EPS & BV
76.82 used Normalized EPS & BV
16.88 used EPS & Tang.BV
31.10 used Normalized EPS & Tang.BV

If I were a shareholder I would want to understand more why the big difference between the Book Value and Tangible Book value. Most companies I look up have a difference but not usually that big a difference.

Mostly this is just for my benefit, my curiosity, and anyone who may care.
I intend to keep this thread running with updated GNVR's over time to watch the trend. So check back on this thread from time to time for an updated GNVR. Normally I only plug into the formula EPS with BV, then Normalized EPS with Tangible Book Value. That's all I'll use for future updates.

As for now with mixing up all that data I have an extreme range of $16.88 to $76.82

Foolish best,
blesto
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (2) | Ignore Thread Prev | Next

Announcements

What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement