This is the third discussion of the ModernGraham Book Club’s reading of Business Adventures: Twelve Classic Tales from the World of Wall Street. This week we are discussing the second chapter of the book, titled “The Fate of the Edsel”.
Archives for September 2015
Inside this monthly PDF report and spreadsheet is a listing of all the companies reviewed by ModernGraham (currently 561 different companies) in a handy table with some key figures, including dividend yield information.
We evaluated 27 different companies this week to determine whether they are suitable for Defensive Investors, those unwilling to do substantial research, or Enterprising Investors, those who are willing to do such research. We also put each company through the ModernGraham valuation model based on Benjamin Graham’s value investing formulas in order to determine an intrinsic value for each. Out of those 27 companies, only 10 were found to be undervalued or fairly valued and suitable for either Defensive or Enterprising Investors.
Darden Restaurants Inc. does not qualify for either the Enterprising Investor or the more conservative Defensive Investor. The Defensive Investor is concerned with the low current ratio, and the high PB ratio.
Cameron International Company qualifies for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned by the lack of dividends, and the high PEmg and PB ratios, while the Enterprising Investor is only initially concerned by the lack of dividends.