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ModernGraham

Devoted to the study and modernization of the theories of Benjamin Graham and Warren Buffett.

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Wednesday, May 4, 2016

Commentary

Reflections on the ModernGraham Valuation Formula

Introducing the New ModernGraham Grading System

Over the summer, I revised the formatting of the presentation of individual company valuations on ModernGraham. As part of that process, I began utilizing 20 years of financial data within the valuations, which allowed me to calculate historical estimates of intrinsic value using the ModernGraham valuation formula. Each valuation thus included a chart showing the price in relation to the MG Value over a period of time. Since then, I’ve been studying those charts in order to determine the effectiveness of the valuation formula. This post will review some of my findings, and introduce a key new metric for ModernGraham advanced premium members to utilize in analyzing investment opportunities.

The Elite

15 Best Stocks For Value Investors This Week – 2/13/16

I 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. I 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 15 were found to be undervalued or fairly valued and suitable for either Defensive or Enterprising Investors.

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