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| {{About|the investing term named after Benjamin Graham|the mathematical figure named after Ronald Graham|Graham's number}}
| | Greetings. Allow me start by telling you the author's title - Phebe. To do aerobics is a thing that I'm totally addicted to. Minnesota has usually been his home but his wife wants them to transfer. Hiring is her day job now and she will not change it anytime quickly.<br><br>my web blog; [http://www.gaysphere.net/user/KJGI home std test] |
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| The '''Graham number''' or '''Benjamin Graham number''' is a figure used in [[securities]] investing that measures a [[stock]]'s so-called fair value.<ref>[http://seekingalpha.com/article/253698-6-deeply-undervalued-small-cap-stocks-trading-below-the-graham-number Seeking Alpha: The Graham Number]</ref> Named after [[Benjamin Graham]], the founder of [[value investing]], the Graham number can be calculated as follows:
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| <math>\sqrt{22.5\times(\text{earnings per share})\times(\text{book value per share})}</math>
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| The final number is, theoretically, the maximum price that a defensive investor should pay for the given stock.<ref>[http://www.istockanalyst.com/article/viewarticle/articleid/2801008 iStock Analyst: The Benjamin Graham Number]</ref> Put another way, a stock priced below the Graham Number would be considered a good value, if it also meets a number of other criteria.
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| This number applies only to certain types of stocks in combination with a number of other criteria. The complete Graham selection procedure is much more elaborate. No decision should be made based on this number alone.<ref>Serenity: [http://www.serenitystocks.com/grahamnumber Benjamin Graham's Misunderstood Graham-Number].</ref>
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| ==Alternative calculation==
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| Earnings per share is calculated by dividing ''net income'' by ''shares outstanding''. Book value is another way of saying ''[[shareholders' equity]]''. Therefore, book value per share is calculated by dividing ''equity'' by ''shares outstanding''. Consequently, the formula for the Graham number can also be written as follows:
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| <math>\sqrt{22.5 \times \left(\frac{\text{net income}}{\text{shares outstanding}}\right) \times \left(\frac{\mathrm{shareholders'\ equity}}{\text{shares outstanding}}\right)}</math>
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| ==References==
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| {{reflist}}
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| {{finance-stub}}
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| [[Category:Valuation (finance)]]
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| [[Category:Mathematical finance]]
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Latest revision as of 15:35, 3 January 2015
Greetings. Allow me start by telling you the author's title - Phebe. To do aerobics is a thing that I'm totally addicted to. Minnesota has usually been his home but his wife wants them to transfer. Hiring is her day job now and she will not change it anytime quickly.
my web blog; home std test