Bond yield now at 2.38% how to calculate

Hello again,

My other question regards intrinsic value and the current AAA corporate bond yield. I’m having some trouble figuring out which to go with. A lot of stocks I screened using the enterprising and NCAV screeners did post a lot of 100%+ intrinsic value stocks. But when I screened stocks myself using similar data points, I came with a larger list, some stocks including EVR and GNTX were listed and had a rating of 7 or above. How does one calculate that into the equation?
I did however find how to calculate today’s bond yield into P/E ratio and got this. 100/2.38=42.016. So I would assume in today’s market that we can invest into companies with up to a P/E ratio of 42?
I’m just a little confused as to what stocks on the screener now reflect such different P/Es and if there is a way to screen better.

Thank you!

Dear gonny17,

Thank you for your forum post!

This issue is discussed in detail in Adjusting Benjamin Graham's Price Calculations Today.

Hey serenity,
Thanks for the response. So with that being said, is there anyway via the stock screener to account for the new yields and p/e? Or is there further research after I find the stocks to figure that part out?

Dear gonny17,

Thank you for your comment!

The link above gives a sample calculation of how Bond Yields of 3.3% would lead to an Intrinsic Value(%) of 70% on Serenity.

A similar calculation for Bond Yields of 2.38% would lead to an Intrinsic Value(%) of approximately 60% on Serenity. Such a calculation is given in Value Investing Across Countries And Economies (which is linked to from the link above).

Hi, in order to adjust the % intrinsic value for the current bond rate (as the system calculates based on the 3.3% US 10 year AA corporate bond), I would need to have the 10 year AA corporate bond current yield for the country I am screening for. But I find it very difficult to find this data. Everywhere I find government bonds in the government website but I cannot find information for the average 10 year AA corporate bond. Any suggestion? Thanks.

Dear rc2752,

Thank you for your comment!

Unfortunately, the availability of this data differs from region to region and Serenity cannot offer much help in this regard. The government bond rate would, obviously, not be of much use here; as the multiples would differ too much for any meaningful analysis.

Corporate AA Effective Yield data for the U.S. is available on ycharts. Corporate Yield data (without rating information) for the U.K. is available on Hargreaves Lansdown.

Thank you!

Graham Resources