Western Refining Inc. qualifies for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the insufficient earnings stability over the last ten years as well as the inconsistent dividend record over that period.
General Motors does not qualify for either the Defensive Investor and the Enterprising Investor. Both investor types are concerned with the short operating history post bankruptcy, as there is not enough data yet to accurately provide information for a full valuation.
Allstate passes the initial requirements of the Enterprising Investor but not the Defensive Investor. In fact, the company passes every requirement of the Enterprising Investor types, but the Defensive Investor is concerned by the lack of earnings stability and insufficient earnings growth over the last ten years.
By using the ModernGraham Valuation Model, I’ve selected the five lowest PEmg (price / normalized earnings) companies reviewed by ModernGraham. Each company has been determined to be undervalued and suitable for the Defensive Investor according to the ModernGraham approach.
Main Street Capital Corporation does not qualify for either the Defensive Investor and the Enterprising Investor. The Defensive Investor is concerned with the small size, low current ratio, short dividend history, and the insufficient earnings stability over the last ten years.
Goldcorp Inc. does not qualify for either the Defensive Investor and the Enterprising Investor. The Defensive Investor is concerned with the low current ratio, insufficient earnings stability or growth over the last ten years, and the poor PEmg and PB ratios.
