Deep value check­list

Shares - - TALKING POINT -

Ben­jamin Gra­ham was a leg­endary fig­ure known as the ‘fa­ther of value in­vest­ing’ and was a men­tor to War­ren Buf­fett. The fol­low­ing stock screen ap­plies Gra­ham’s 10-point check­list of val­u­a­tion and fi­nan­cial mea­sures. De­vised not long be­fore his death in 1976 this ap­proach was more sys­tem­atic than his other value in­vest­ing strate­gies.

In­ter­est­ingly this screen threw up sev­eral house­builders. We dis­cussed our reser­va­tions on house­builders in last week’s Edi­tor’s View col­umn and this is an in­di­ca­tion of why you need to take other fac­tors into ac­count when de­ter­min­ing if a stock is gen­uinely un­der­val­ued.

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