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4 Stocks With Low Graham Numbers
live (public) 0.08% May 03
Will Consumer Confidence Drive Up Certain Stocks
We are shifting gears away from dividend stocks to consider Alexander Crawford's contention that
Consumer Confidence
rising may benefit certain stocks. According to the Bloomberg Consumer
Comfort Index, which ranges from -100 to 100, consumers are more
“comfortable” than they’ve been in a year. The index rose to -39.8 from
-41.7 in the middle of February. This news came out just as the Labor
Department released news reduced first time unemployment claims.
To find the companies that might benefit from this, he ran a screen on
the 30 stocks of the Dow Jones Industrial Average for those that appear
undervalued relative to the
Graham Number.
Graham Number = SQRT(22.5 x EPS x BookValuePS)
The contention is that stocks trading well below their Graham Number may
be undervalued. Here are the ones with the biggest upside:
- Alcoa, Inc. (AA): Graham Number fair value = sqrt(22.5*0.55*12.96)
= $12.66. Based on the stock’s price at $10.35, this implies a
potential upside of 22% from current levels
- Chevron Corp. (CVX): Graham Number fair value = sqrt(22.5*13.44*60.7) = $135.48. Based on the stock’s price at $109.91, this implies a potential upside of 23% from current levels.
- Hewlett-Packard Company (HPQ): Graham Number fair value = sqrt(22.5*3.32*19.41) = $38.08. Based on the stock’s price at $26.29, this implies a potential upside of 44% from current levels.
- The Travelers Companies, Inc. (TRV): Graham Number fair value = sqrt(22.5*3.37*62.31) = $68.74. Based on the stock’s price at $58.66, this implies a potential upside of 17% from current levels
Any company in the Dow 30 are big players that are not going to disappear overnight. The only one about which I have concern is HPQ but this is a list that is worthy of comparison with our dividend bearing ETF benchmark.
Asset | Fund in this portfolio | Price change* | Percentage |
---|---|---|---|
Asset1 | AA (Alcoa Corp) | 2.31% | 8.76% |
Asset1 | CVX (Chevron Corp) | 0.30% | 31.49% |
Asset1 | HPQ (HP Inc) | 0.86% | 11.31% |
Asset1 | TRV (The Travelers Companies Inc) | 0.24% | 48.44% |
* Day change on 05/03/2024.
Since 01/19/2005
Name | YTD* Return |
1Yr AR** |
3Yr AR** |
5Yr AR** |
10Yr AR** |
15Yr AR** |
---|---|---|---|---|---|---|
4 Stocks With Low Graham Numbers | 9.5% | 13.0% | 11.4% | 10.2% | 7.7% | 9.1% |
VFINX (Vanguard (S&P 500) Index) | 9.0% | 29.4% | 9.1% | 13.8% | 12.6% | 14.3% |
VBINX (Vanguard Balance (60% stocks/40% bonds) | 3.5% | 15.3% | 2.8% | 7.7% | 7.7% | 9.5% |
* YTD: Year to Date
** AR: Annualized Return
Last 1 Week* | YTD*(2024) | 1 Yr | 3 Yr | 5 Yr | 10 Yr | 15 Yr | Since 01/19/2005 |
2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010 | 2009 | 2008 | 2007 | 2006 | 2005 | |
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Annualized Return(%) | -1.0 | 9.5 | 13.0 | 11.4 | 10.2 | 7.7 | 9.1 | 8.2 | -4.0 | 15.7 | 41.9 | -4.2 | 9.5 | -17.8 | 22.4 | 31.6 | -20.4 | 16.4 | 33.6 | 0.3 | -7.6 | 1.9 | 25.2 | -29.6 | 20.1 | 28.0 | 20.1 |
Sharpe Ratio | NA | 0.57 | 0.6 | 0.43 | 0.3 | 0.28 | NA | 0.3 | -0.47 | 0.55 | 1.97 | -0.09 | 0.57 | -0.97 | 2.11 | 1.59 | -1.02 | 1.26 | 2.6 | 0.02 | -0.28 | 0.1 | 0.85 | -0.64 | 0.88 | 1.73 | 1.27 |
Draw Down(%) | NA | 7.0 | 12.7 | 28.9 | 50.8 | 55.4 | NA | 55.4 | 21.1 | 28.9 | 12.1 | 47.2 | 12.6 | 28.0 | 6.3 | 11.8 | 25.1 | 10.3 | 7.4 | 11.2 | 30.7 | 18.6 | 30.1 | 44.0 | 11.8 | 11.5 | 10.2 |
Standard Deviation(%) | NA | 14.4 | 15.3 | 21.2 | 28.5 | 23.5 | NA | 23.9 | 17.6 | 26.2 | 21.2 | 49.2 | 14.1 | 19.6 | 10.3 | 19.8 | 20.1 | 13.0 | 12.9 | 16.3 | 27.2 | 19.0 | 29.6 | 47.8 | 19.3 | 14.3 | 14.2 |
Treynor Ratio | NA | 0.15 | 0.16 | 0.12 | 0.09 | 0.09 | NA | 0.29 | -0.11 | 0.2 | 0.41 | -0.04 | 0.09 | -0.82 | -3.33 | 8.49 | 1.97 | 1.27 | -3.86 | -0.16 | 2.35 | -0.45 | -1.43 | 1.57 | -0.87 | 8.69 | 9.19 |
Alpha | NA | 0.06 | -0.01 | 0.02 | 0.0 | 0.01 | NA | 0.03 | -0.08 | 0.12 | 0.05 | -0.07 | -0.05 | -0.07 | 0.08 | 0.11 | -0.08 | 0.06 | 0.13 | 0.01 | -0.02 | 0.02 | 0.13 | -0.13 | 0.07 | 0.09 | 0.07 |
Beta | NA | 0.54 | 0.59 | 0.75 | 0.98 | 0.74 | NA | 0.25 | 0.76 | 0.72 | 1.02 | 1.16 | 0.9 | 0.23 | -0.07 | 0.04 | -0.1 | 0.13 | -0.09 | -0.02 | -0.03 | -0.04 | -0.18 | -0.19 | -0.2 | 0.03 | 0.02 |
RSquared | NA | 0.2 | 0.21 | 0.38 | 0.55 | 0.32 | NA | 0.04 | 0.32 | 0.44 | 0.39 | 0.69 | 0.63 | 0.04 | 0.0 | 0.0 | 0.01 | 0.01 | 0.01 | 0.0 | 0.0 | 0.0 | 0.03 | 0.03 | 0.03 | 0.0 | 0.0 |
Sortino Ratio | NA | 0.83 | 0.86 | 0.6 | 0.4 | 0.38 | NA | 0.41 | -0.63 | 0.77 | 2.96 | -0.11 | 0.76 | -1.23 | 3.35 | 2.58 | -1.32 | 1.83 | 3.95 | 0.02 | -0.37 | 0.13 | 1.2 | -0.89 | 1.2 | 2.76 | 1.87 |
Yield(%) | N/A | 1.47 | 3.68 | 2.96 | 2.67 | 2.46 | N/A | 2.43 | 2.67 | 2.77 | 3.48 | 1.53 | 1.75 | 0.64 | 0.64 | 4.32 | 2.93 | 3.39 | 3.15 | 2.78 | 2.24 | 1.94 | 2.28 | 1.77 | 1.95 | 2.25 | 2.22 |
Dividend Growth(%) | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
*: NOT annualized;YTD: Year to Date
**Inception: starting from 01/19/2005