While Serenity shows CATO as meeting Graham defensive criteria. NASDAQ analysis
finds these reasons why it fails.
P/E RATIO: [FAIL]
The Price/Earnings (P/E) ratio, based on the greater of the current PE or the PE using average earnings over the last 3 fiscal years, must be "moderate", which this methodology states is not greater than 15. Stocks with moderate P/Es are more defensive by nature. CATO's P/E of 28.18 (using the current PE) fails this test.
PRICE/BOOK RATIO: [FAIL]
The Price/Book ratio must also be reasonable. That is, the Price/Book multiplied by P/E cannot be greater than 22. CATO's Price/Book ratio is 0.94, while the P/E is 0. CATO fails the Price/Book test.