Benjamin Graham is the creator of what is known today as value investing. He was the author of the classic book ‘The Intelligent Investor’ and co-authored ‘Security Analysis’. Graham was a successful money manager. He was also a teacher at Columbia Business School and UCLA’s Anderson School of Management with one of his top students, Warren Buffett, going on to use his investing principles to hold the the title of richest person in the world many times.
Benjamin Graham believed in buying companies for less than their intrinsic value when possible or to at least create a great risk/reward ratio at purchase getting a great price versus what a company is worth. His exit strategy was then selling the company as it reverted back closer to its true value.
Here are Benjamin Graham’s stock screener parameters for finding and quantifying his type of value stocks.
Company Market Cap is >= $300 million (US)
Current Ratio latest filing is >=1.5
Long-term debt to working-capital ratio latest FQ is =< 110%
Earnings per share for each of the last 5 years is > 0
Earnings per share for the last 12 months is >0
Dividend latest Fiscal Year is > 0
Earnings per share latest Fiscal year is > Earnings per share 5 years ago
Take the top 50 stocks with the lowest Price/Book ratio.