For students of Benjamin Graham and David Dodd, book value has an integral part to play in the evaluation of a company. Price to book value forms a vital part of the so-called ‘Graham Number,’ which is named after Benjamin Graham (who is widely considered to be the Godfather of value investing) and is used as a general test of trying to identify stocks that are currently selling at an attractive price. Any stock price below the Graham number is considered undervalued and thus worth investing in. To qualify, shares must be trading at a price to earnings multiple of…
Is Book Value No Longer Relevant? Sorta True
Sign up now and get our in-depth FREE e-books on famous investors like Klarman, Dalio, Schloss, Munger Rupert is a committed value investor and regularly writes and invests following the principles set out by Benjamin Graham. He is the editor and co-owner of Hidden Value Stocks, a quarterly investment newsletter aimed at institutional investors. Rupert owns shares in Berkshire Hathaway. Rupert holds qualifications from the Chartered Institute For Securities & Investment and the CFA Society of the UK. Rupert covers everything value investing for ValueWalk