C.R. Bard Inc. is a very intriguing company for Enterprising Investors, having passed all five of the investor type’s requirements. The company does not quite qualify for the Defensive Investor due to the high PEmg and PB ratios.
Archives for March 2014
This is the sixth discussion of the ModernGraham Book Club’s reading of The Intelligent Investor by Benjamin Graham. This week we will discuss the sixth chapter, which is titled “Portfolio Policy for the Enterprising Investor: Negative Approach.” Even if you don’t have the book I think you will find our discussions to be very useful in your own understanding of value investing, and you can still bring a lot to the discussion from your own experiences as an investor.
Actavis is not suitable for either the Defensive Investor or the Enterprising Investor. In fact, the company fails all five of the Enterprising Investor’s requirements and only satisfies the Defensive Investor’s requirement regarding size.
Schlumberger Ltd passes all of the requirements of the Enterprising Investor, but does not qualify for the Defensive Investor. The company’s current ratio is too low while the PEmg and PB ratios are too high for the Defensive Investor.
Motorola Solutions Inc. is not suitable for the Defensive Investor, but is suitable for the Enterprising Investor. The company only passes the Defensive Investor’s requirements regarding size and current ratio, but the Enterprising Investor’s only concern is the lack of earnings stability over the five year period.