Ben Graham, the father of Value Investing and teacher of Warren Buffett, was also a successful investor in 20th century. The four bread and butter strategies, employed by his firm, the Graham-Newman corporation between 1926 and 1956 included arbitrages, related hedges, liquidations and Net-Current-Asset or Bargain issues. Today I will provide a brief overview of the Bargain Issues strategy and provide some current stock picks.
The main goal with the bargain issues was to purchase shares in companies for less than two thirds of their asset values at prices that a private owner might pay at an acquisition. The fact that investors paid less than two thirds of the net working capital for the bargain stocks provided a margin of safety to those shareholders. Furthermore Graham-Newman strived to maintain a diversified portfolio of these Net Current Asset stocks, sometimes holding as much as one hundred of those issues which were worth considerably more than what they are selling for. Experience had taught Graham that few stocks are ultimately worth less than their net current assets minus the total liabilities.
Using this screen from GrahamInvestor.com site I came out with the following list of 40 bargain stocks ( You could also open the list from this link):
It’s interesting to note that there are two builders – Beazer Homes and Standard Pacific. It’s definitely suspect whether their inventories could be sold at the levels that they keep on their books. The rest of the issues include stocks with low trading volumes. Furthermore most of the stocks on the list are losing money. It would be interesting to see how these enterprises perform over the next two years.
Full Disclosure: None
Relevant Articles:
- Constellation Energy (CEG) Merger Arbitrage Opportunity
- Warren Buffet - The richest investor in the World
- Warren Buffett – The Ultimate Dividend Investor
- Buffett's Berkshire Hathaway Stock Portfolio Holdings.
Popular Posts
-
I review dividends increases every week, as part of my monitoring process. I typically focus my attention to companies that have raised divi...
-
Today, I wanted to share the story of Earl Crawley , a parking lot attendant who accumulated a portfolio of dividend stocks worth $500,000, ...
-
Bill Gates is one of the founders of software giant Microsoft (MSFT). Before Microsoft went public in 1986, he held 11,222,000 shares in th...
-
Increasing the dividend is a sign of confidence in the business. I study dividend increases every week, and focus my reviews on the companie...
-
I am a big fan of Warren Buffett, the Oracle of Omaha. His letters to shareholders are an excellent resource for students of value investing...
-
I review the list of dividend increases every week as part of my monitoring process. This exercise helps me stay in shape, and abreast on wh...
-
I review the list of dividend increases every week, in an effort to monitor the dividend growth investing universe. This exercise helps me r...
-
Do you ever wonder how your net worth compares to others in your age group? Do you ever wonder if you are ahead or behind? Do you also ever ...
-
The NASDAQ US Broad Dividend Achievers Select Index is comprised of a select group of securities with at least ten consecutive years of incr...
-
In my investing, look for businesses I can understand that have some sort of a competitive advantage that translates into consistent earn...
