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
-
3M Company (MMM) operates as a diversified technology company worldwide, which operates in five segments: Industrial, Safety and Graphics, H...
-
Last week, there were five dividend growth companies which increased distributions to their shareholders. Each of these companies has manage...
-
There are a lot of stories about people who become financially independent these days in their 30s or 40s. While these are isolated instance...
-
It is time for my weekly review of notable dividend increases from the past week. This review is part of my monitoring process. It is also ...
-
I use a few quantitative factors in my investing including streak of annual dividend increases, dividend payout ratios, growth in earnings p...
-
Lowe's Companies, Inc. (LOW), together with its subsidiaries, operates as a home improvement retailer in the United States, Canada, and ...
-
The Home Depot, Inc. (HD) operates as a home improvement retailer. It operates The Home Depot stores that sell various building materials, ...
-
UnitedHealth Group Incorporated (UNH) operates as a diversified health care company in the United States. It operates through four segments...
-
As part of my monitoring process , I look at the list of dividend increases every week. I usually focus my attention on the companies that h...
-
On Tuesday of this week, British Company Vodafone (VOD) cut its dividend by 40% . Not surprisingly, this dividend cut occurred several month...
