T.Rowe Price Group is suitable for the Enterprising Investor but not for the Defensive Investor. The Defensive Investor is concerned by the high PEmg and PB ratios.
We evaluated 20 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. Here’s a summary of the ModernGraham Valuations.
By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries. What follows is a specific look at how T. Rowe Price Group (TROW) fares in the ModernGraham valuation model.