Price to Graham number (Price/Graham)
How the current price compares with Graham's conservative ceiling.
Below 1.0 the share passes Graham's price test outright.
How it is computed here
Share price / Graham number
Today's market price against the latest available fundamentals. Combines today's market price with the most recently filed fundamentals. It moves whenever the price moves, with nothing having changed in the business. Filed under value. Lower is the stronger reading, other things equal.
The readings, and where the lines come from
| Range | Reading |
|---|---|
| below 1.00 | Passes Graham's price test |
| 1.00 to 1.50 | Above the ceiling |
| 1.50 and above | Well above the ceiling |
Graham, The Intelligent Investor (rev. ed. 1973), ch. 14 defensive-investor criteria.
When it misleads
- Inherits every limitation of the Graham number, including its blindness to intangible assets.
- Withheld whenever the Graham number itself is undefined.
Questions
How is price to graham number calculated?
Share price / Graham number. Today's market price against the latest available fundamentals. Combines today's market price with the most recently filed fundamentals. It moves whenever the price moves, with nothing having changed in the business.
What does price to graham number tell a value investor?
Below 1.0 the share passes Graham's price test outright.
When does price to graham number mislead?
Inherits every limitation of the Graham number, including its blindness to intangible assets. Withheld whenever the Graham number itself is undefined.