Benjamin Graham is known as the "father of value investing". Warren Buffett writes that — for nearly six decades — he's been exclusively following Graham's Value Investing framework.
Introduction
In Nov 2012 — nearly 6 years ago — we first discussed How To Build A Complete Benjamin Graham Portfolio; by applying Graham's 17-rule framework to 5000+ NYSE and NASDAQ stocks.
A powerful new financial API now lets us apply Graham's complete framework to stocks across the US, UK, Canada, New Zealand, Australia and other European Countries.
Given below are the results of such an analysis for the United Kingdom, Germany, France, Canada and Australia.
For the purposes of this article, we will exclude the last two rules for NCAV (Net Current Asset Value or Net-Net) stocks which are already well known and quite simplistic in nature.
United Kingdom
With over 7000 stocks listed and nearly 200 of them completely clearing Graham's criteria, the LSE and LTS exchanges provide very fertile ground for the quantitatively minded Value Investor.
Defensive Grade
Renishaw PLC (LSE:RSW) is a British engineering company based in Wotton-under-Edge, Gloucestershire; and is a leading company in additive manufacturing, or 3D metal printing, where machines print parts from metal powder.
Renishaw PLC clears all of Graham's qualitative criteria above for Defensive investment, and has an optimum Defensive price (Graham Number) of £14.49.
Enterprising Grade
Solid State PLC (LSE:SOLI) is a high value-add manufacturer and specialist design-in distributor to the electronics industry.
Grainger PLC (LSE:GRI) is a British-based residential property business headquartered in Newcastle upon Tyne.
Both companies clear all of Graham's qualitative criteria above for Enterprising investment. Solid State PLC has an optimum Enterprising price of £2.09, and Grainger PLC has one of £1.96.
More Examples
Company | Ticker Symbol | Currency | Sales or Size (100% ⇒ 500 Million) | Current Assets ÷ [2 x Current Liabilities] | Net Current Assets ÷ Long Term Debt | Earnings Stability (100% ⇒ 10 Years) | Dividend Record (100% ⇒ 20 Years) | Earnings Growth (100% ⇒ 33% Growth) | Equity÷ Debt | Graham Number | Graham Number ÷ Previous Close | NCAV or Net-Net | NCAV Price ÷ Previous Close | Graham Grade | Intrinsic Value | Intrinsic Value ÷ Previous Close |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Renishaw PLC (RSW) | LSE:RSW | GBP | 122.30% | 186.12% | 100.00% | 100.00% | 100.00% | 596.36% | 284.23% | 14.49 | 30.47% | 2.89 | 6.08% | Defensive | 14.49 | 30.47% |
Baronsmead VCT 4 PLC (BNS) | LSE:BNS | GBP | 0.73% | 804.81% | 100.00% | 100.00% | 55.00% | 0.00% | 12,565.38% | 0.67 | 72.83% | 0.12 | 13.04% | Enterprising | 0.6 | 65.22% |
Orchard Funding Group PLC (ORCH) | LSE:ORCH | GBP | 0.91% | 87.94% | 32,625.00% | 60.00% | 10.00% | 0.00% | 76.30% | 0.96 | 94.12% | 0.61 | 59.80% | Enterprising | 0.66 | 64.71% |
Solid State PLC (SOLI) | LSE:SOLI | GBP | 9.25% | 117.59% | 100.00% | 100.00% | 100.00% | 676.77% | 229.55% | 3.94 | 121.60% | 1.11 | 34.26% | Enterprising | 2.09 | 64.51% |
Grainger PLC (GRI) | LSE:GRI | GBP | 52.94% | 856.75% | 109.94% | 50.00% | 100.00% | 0.00% | 72.95% | 2.86 | 94.08% | 0.14 | 4.61% | Enterprising | 1.96 | 64.47% |
Germany
Germany seems to have the most Enterprising grade stocks, which is probably not surprising since Germany also has the most listed stocks of the countries analyzed by far.
A total of 25,0000 stocks in all are listed on the FRA, STU, XTER and HAM exchanges; with nearly 750 of them completely clearing Graham's criteria.
Defensive Grade
Baxter International Inc (XTER:BTL) is a Fortune 500 American health care company with headquarters in Deerfield, Illinois, that primarily focuses on products to treat hemophilia, kidney disease, immune disorders and other chronic and acute medical conditions.
Baxter International Inc clears all of Graham's qualitative criteria above for Defensive investment, and has an optimum Defensive price (Graham Number) of €34.66.
Enterprising Grade
Schweiter Technologies AG (FRA:SN2) is a Switzerland-based holding company primarily engaged in the development, manufacture and global distribution of machinery.
Schweiter Technologies clears all of Graham's qualitative criteria above for Enterprising investment, and has an optimum Enterprising price of €687.59.
More Examples
Company | Ticker Symbol | Currency | Sales or Size (100% ⇒ 500 Million) | Current Assets ÷ [2 x Current Liabilities] | Net Current Assets ÷ Long Term Debt | Earnings Stability (100% ⇒ 10 Years) | Dividend Record (100% ⇒ 20 Years) | Earnings Growth (100% ⇒ 33% Growth) | Equity÷ Debt | Graham Number | Graham Number ÷ Previous Close | NCAV or Net-Net | NCAV Price ÷ Previous Close | Graham Grade | Intrinsic Value | Intrinsic Value ÷ Previous Close |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Baxter International Inc (BTL) | XTER:BTL | EUR | 1,784.86% | 128.73% | 126.59% | 100.00% | 100.00% | 212.72% | 114.02% | 34.66 | 63.49% | 0 | 0.00% | Defensive | 34.66 | 63.49% |
Nike Inc (NKE) | XTER:NKE | EUR | 6,158.54% | 125.28% | 262.23% | 100.00% | 100.00% | 443.00% | 77.11% | 14.19 | 19.47% | 1.23 | 1.69% | Defensive | 14.19 | 19.47% |
Novolipetsk Steel PJSC (N7MG) | STU:N7MG | EUR | 1,701.03% | 117.83% | 142.66% | 100.00% | 20.00% | 23.51% | 152.78% | 18.72 | 84.67% | 0.51 | 2.31% | Enterprising | 14.8 | 66.94% |
Schweiter Technologies AG (SN2) | FRA:SN2 | EUR | 167.84% | 205.22% | 25,876.51% | 80.00% | 20.00% | 0.00% | 289.27% | 796.6 | 77.49% | 194.83 | 18.95% | Enterprising | 687.59 | 66.89% |
France
With only 979 stocks listed on the XPAR, France is perhaps the smallest of the markets analyzed in this article but still manages to yield over 20 Enterprising grade stocks.
Defensive Grade
Dassault Systèmes SE (XPAR:DSY) is a European software company headquartered in Vélizy-Villacoublay, France, that develops 3D design, 3D digital mock-up, and product lifecycle management software.
Dassault Systèmes clears all of Graham's qualitative criteria above for Defensive investment, and has an optimum Defensive price (Graham Number) of €25.02.
Enterprising Grade
Methanor (XPAR:ALMET) is a renewable energy company based in France that specializes in producing energy from agricultural biogas.
Methanor clears all of Graham's qualitative criteria above for Enterprising investment, and has an optimum Enterprising price of €3.22.
More Examples
Company | Ticker Symbol | Currency | Sales or Size (100% ⇒ 500 Million) | Current Assets ÷ [2 x Current Liabilities] | Net Current Assets ÷ Long Term Debt | Earnings Stability (100% ⇒ 10 Years) | Dividend Record (100% ⇒ 20 Years) | Earnings Growth (100% ⇒ 33% Growth) | Equity÷ Debt | Graham Number | Graham Number ÷ Previous Close | NCAV or Net-Net | NCAV Price ÷ Previous Close | Graham Grade | Intrinsic Value | Intrinsic Value ÷ Previous Close |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dassault Systemes SE (DSY) | XPAR:DSY | EUR | 645.60% | 117.83% | 207.21% | 100.00% | 100.00% | 349.65% | 131.72% | 25.02 | 19.62% | 2.19 | 1.72% | Defensive | 25.02 | 19.62% |
Methanor (ALMET) | XPAR:ALMET | EUR | 0.00% | 2,900.00% | 100.00% | 50.00% | 10.00% | 0.00% | 34,533.33% | 3.66 | 74.69% | 1.02 | 20.82% | Enterprising | 3.22 | 65.71% |
Tipiak SA (TIPI) | XPAR:TIPI | EUR | 39.62% | 76.15% | 113.25% | 100.00% | 45.00% | 3.49% | 47.74% | 84.32 | 110.22% | 0 | 0.00% | Enterprising | 49.85 | 65.16% |
Radiall SA (RLL) | XPAR:RLL | EUR | 62.03% | 165.56% | 2,359.12% | 70.00% | 60.00% | 1,386.93% | 231.16% | 227.42 | 90.07% | 75.4 | 29.86% | Enterprising | 164.46 | 65.13% |
Sabeton (SABE) | XPAR:SABE | EUR | 14.20% | 141.26% | 216.94% | 50.00% | 50.00% | 325.33% | 154.19% | 26.9 | 108.47% | 5.4 | 21.77% | Enterprising | 16.12 | 65.00% |
Canada
Canada is one of the larger markets in this list, with over 4000 stocks listed on the TSX, TSXV and XCNQ; and yields over 40 completely Defensive and Enterprising grade Graham stocks.
Defensive Grade
Winpak Ltd (TSX:WPK) is a company based in Winnipeg, Manitoba, Canada, that manufactures and distributes packaging materials and products that are used to protect perishable foods, beverages, and in health care applications.
Winpak Ltd clears all of Graham's qualitative criteria above for Defensive investment, and has an optimum Defensive price (Graham Number) of C$28.21.
Enterprising Grade
PFB Corp (TSX:PFB) manufactures building products for the construction industry as well as custom molded products for the automotive and other industries.
PFB Corp clears all of Graham's qualitative criteria above for Enterprising investment, and has an optimum Enterprising price of C$5.35.
More Examples
Company | Ticker Symbol | Currency | Sales or Size (100% ⇒ 500 Million) | Current Assets ÷ [2 x Current Liabilities] | Net Current Assets ÷ Long Term Debt | Earnings Stability (100% ⇒ 10 Years) | Dividend Record (100% ⇒ 20 Years) | Earnings Growth (100% ⇒ 33% Growth) | Equity÷ Debt | Graham Number | Graham Number ÷ Previous Close | NCAV or Net-Net | NCAV Price ÷ Previous Close | Graham Grade | Intrinsic Value | Intrinsic Value ÷ Previous Close |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Winpak Ltd (WPK) | TSX:WPK | CAD | 226.48% | 406.28% | 100.00% | 100.00% | 100.00% | 658.51% | 636.42% | 28.21 | 58.94% | 7.82 | 16.34% | Defensive | 28.21 | 58.94% |
PFB Corp (PFB) | TSX:PFB | CAD | 21.11% | 114.88% | 219.84% | 100.00% | 100.00% | 271.13% | 181.82% | 10.10 | 118.41% | 0.81 | 9.50% | Enterprising | 5.35 | 62.72% |
Ansar Financial and Development Corp (AFD) | XCNQ:AFD | CAD | 0.04% | 2,190.00% | 100.00% | 50.00% | 5.00% | 0.00% | 32,400.00% | 0.47 | 82.46% | 0.14 | 24.56% | Enterprising | 0.34 | 59.65% |
Labrador Iron Ore Royalty Corp (LIF) | TSX:LIF | CAD | 31.65% | 83.42% | 100.00% | 100.00% | 30.00% | 0.00% | 324.58% | 17.45 | 63.00% | 0.00 | 0.00% | Enterprising | 16.26 | 58.70% |
ZCL Composites Inc (ZCL) | TSX:ZCL | CAD | 37.63% | 153.52% | 100.00% | 70.00% | 30.00% | 588.24% | 377.21% | 6.34 | 85.68% | 1.57 | 21.22% | Enterprising | 4.13 | 55.81% |
Australia
Australia yields a surprisingly high proportion of Defensive and Enterprising grade Graham stocks. The ASX lists nearly 2500 stocks and almost 50 of them completely clear Graham's criteria for Defensive or Enterprising investment.
Defensive Grade
Kingwest Resources Ltd (ASX:KWR) offers gold exploration, drilling, and processing; and serves customers in Australia.
Kingwest Resources Ltd clears all of Graham's qualitative criteria above for Defensive investment, and has an optimum Defensive price (Graham Number) of A$47.91.
Enterprising Grade
Select Harvests Ltd (ASX:SHV) is Australia's largest almond grower and processor, and manages almond orchards in Victoria, New South Wales and South Australia.
Select Harvests Ltd clears all of Graham's qualitative criteria above for Enterprising investment, and has an optimum Enterprising price of A$3.04.
More Examples
Company | Ticker Symbol | Currency | Sales or Size (100% ⇒ 500 Million) | Current Assets ÷ [2 x Current Liabilities] | Net Current Assets ÷ Long Term Debt | Earnings Stability (100% ⇒ 10 Years) | Dividend Record (100% ⇒ 20 Years) | Earnings Growth (100% ⇒ 33% Growth) | Equity÷ Debt | Graham Number | Graham Number ÷ Previous Close | NCAV or Net-Net | NCAV Price ÷ Previous Close | Graham Grade | Intrinsic Value | Intrinsic Value ÷ Previous Close |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Kingwest Resources Ltd (KWR) | ASX:KWR | AUD | 164.02% | 131.38% | 412.40% | 100.00% | 100.00% | 266.01% | 131.07% | 47.91 | 25.23% | 7.1 | 3.74% | Defensive | 47.91 | 25.23% |
Cochlear Ltd (COH) | ASX:COH | AUD | 272.74% | 101.53% | 205.90% | 100.00% | 100.00% | 118.93% | 111.85% | 30.2 | 14.98% | 0.66 | 0.33% | Defensive | 30.2 | 14.98% |
Select Harvests Ltd (SHV) | ASX:SHV | AUD | 41.31% | 224.54% | 400.06% | 60.00% | 100.00% | 0.00% | 274.56% | 4.92 | 93.71% | 0.27 | 5.14% | Enterprising | 3.04 | 57.90% |
SRG Ltd (SRG) | ASX:SRG | AUD | 47.68% | 78.52% | 100.00% | 100.00% | 40.00% | 0.00% | 132.05% | 1.73 | 104.85% | 0.44 | 26.67% | Enterprising | 0.92 | 55.76% |
Washington H Soul Pattinson & Co Ltd (SOL) | ASX:SOL | AUD | 224.03% | 134.46% | 2,667.10% | 100.00% | 100.00% | 0.00% | 455.13% | 18.17 | 74.13% | 0 | 0.00% | Enterprising | 13.6 | 55.49% |
Observations
The first fact that becomes immediately obvious from such an analysis is the abundance of Enterprising grade stocks in all of the above markets. This is quite similar to the experience with U.S. markets as well.
This may possibly be explained by the central Value Investing tenet that markets tends to overvalue great stocks and undervalue good ones, which — strangely enough — makes the good stocks better investments than the great ones.
The most important takeaway here though, is probably that Benjamin Graham Value Investing is alive and well; and for those who are willing to do the statistical work, there are opportunities in every stock market around the world even to this day.
Submitted by GrahamValue. Created on Thursday 27th September 2018. Updated on Friday 18th March 2022.