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Benjamin Graham, considered to be the father of value investing, remains relevant today. His great work The Intelligent Investor from time to time, a must read book even if you don’t consider yourself a value investor.

Five Graham-inspired stock screens, including one based on his “stocks for the defensive investor.”

  1. Market Capitalization size. A company must have at least $500 million in sales on a trailing 12-month basis. (Graham used a $100 million minimum and at least $50 million in total assets.)
  2. Strong financial condition. A firm must have a “current ratio” (current assets divided by current liabilities) of at least 2.0. It must also have less long-term debt less than working capital.
  3. Dividend Distribution. The company must have paid a dividend for the past seven years. (Graham required 20 years.)
  4. Earnings growth. Earnings must have expanded by at least 3% compounded annually over the past seven years. (Graham mandated a one-third gain in earnings per share over the latest 10 years.)
  5. Price-to-earnings ratio. A stock must have had a 15 or lower average P/E over the past three years. The price-to-earnings ratio times the price-to-book ratio must be less than 22.5.

 

 

 

Mr Masum

With over 11 years of experience in Financial and stock market, Mr Masum Choudhury has trained many students in stock trading trough his various workshops. He trades actively and training is his passion. He has a very keen interest in Forex trading and working as a consultant for various export houses guiding them on exchange. He handled the portfolio worth $6 lakhs and managed it successfully. He actively trains in various corporate.

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