Book Value Per Share Graham

The book value per share and the market value per share are some of the tools used to.

Book value per share graham. The graham number or benjamin graham number is a figure used in securities investing that measures a stock s so called fair value. Book value provides a good indication of the underlying value of a company. Example of graham number for example if the earning per share for a single share of company abc is 1 50 the book value per share is 10 the graham number would be 18 37.

If the total value of a company is 10 million and it has 1 million shares of stock outstanding. Graham book value per share from 2006 to 2020. Book value per share can be defined as the amount of equity available to shareholders expressed on a per common share basis.

A guide to value investing since the publication of the intelligent investor by ben graham what is commonly known as value investing has become one of the most widely respected and widely followed methods of stock picking. Named after benjamin graham the founder of value investing the graham number can be calculated as follows. Prefer using the bvps as a.

Find companies with price to book value p bv ratios less than 1 20. Book value per share bvps shareholder equity total outstanding common shares 22 5 the number set by graham. It has a 10 per share book value.

Now the shares will trade at whatever value the market gives them based on future expectations being good or bad and technical price action patterns the book value is only the current fundamental intrinsic value of the company based on. P e ratios mentioned in rule 5 can sometimes be misleading. It is the product of his maximum p e ratio 15 and his maximum book value per share 1 5.