Stocks That are Undervalued By the Ben Graham Number
Ben Graham is the man who developed the Graham number equation. He was a former mentor of Warren Buffet and the so-called godfather of value investing. The Graham Number is the maximum price an investor should pay for a stock. It is derived from two data points: current eps and current book value per share. When you apply the Graham number as a market filter, there are a few companies that show up as being undervalued based on this metric.
Many of these companies are in the technology and telecom sectors. For example, there is SK Telecom Co. Ltd in the wireless communications industry, with a potential upside of 35% from the current market price to the implied Graham number price. AT&T in the telecom services industry is also undervalued based on the Graham number, with a potential upside of 33.5% from current market price.