Stocks Ben Graham Might Buy If He Were Alive Now
Via John Dorfman in Bloomberg:
Each year from 2001 through 2006 I wrote a column on stocks I believed Graham would have liked were he still alive. This year I revive the tradition.
I have designed a few criteria that I believe reflect the spirit, and to some extent the letter, of the maestro’s methods.
Channeling Graham
What I call Graham stocks have a share price that’s less than book value (corporate net worth) and less than 12 times earnings, as well as debt less than 50 percent of stockholders’ equity.
Graham’s own metrics were vastly more complex and numerous, and he allowed room for judgment. Also, because he did much of his investing in the 1930s and 1940s, Graham was able to find some bargains the likes of which do not exist today.
Nonetheless, I think Graham would find some stocks to like if he were an active investor now.
One example is Tutor Perini Corp., a general contractor that specializes in large construction projects. It is based in Sylmar, California.
I like Tutor Perini’s ability to tackle big and diverse projects. It has built hotels and convention centers, airport runways, solar plants, the police headquarters building in Los Angeles. The ability to take on difficult projects often confers some pricing power.
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Tags: value investing
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