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
-
In order to become a successful investor, you need to survive first. You need to put yourself into a position, where your investments cannot...
-
As part of my review process, I look at the dividend increases every week. I use the following resources to compile this list, if you are i...
-
Warren Buffett does not need any introduction. He is a very successful investor who is in charge of Berkshire Hathaway. He has an impressiv...
-
In my monitoring process, I tend to analyze companies I own once every 12 to 18 months. However, I also receive push notifications such as a...
-
Back in 2017, I made a bet with Warren Buffett and my friends Carl over at 1500Days and Ben at Suredividend . Buffett does not know that...
-
I have tracked dividend increases on this site for over a decade, almost every single week. I use a process to compile dividend increases fo...
-
I am frequently asked by readers about resources I use. While I have discussed before the resources I use to monitor my holdings, and I hav...
-
I review the list of dividend increases as part of my monitoring process. This process helps me review how the companies I own are doing. It...
-
A little over two years ago I launched a project , where I am trying to show readers how I would go about building a dividend portfolio from...
-
The S&P Dividend Aristocrats index tracks companies in the S&P 500 that have increased dividends every year for at least 25 years...
