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Strategies & Market Trends : Value Investing

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From: E_K_S	12/28/2011 6:06:34 PM
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Value Ideas: 8 Deeply Undervalued Stocks for Your Watchlist fool.com Excerpt from the article: Graham Number Graham created an equation to help search for potentially undervalued stocks, and identifies what is known as the "Graham Number," or the maximum fair value for a stock. Any stock trading at a significant discount to this number is considered by the equation to be undervalued. The Graham Number only requires two data points: current earnings per share and current book value per share. The Graham Number = Square Root of (22.5) x (TTM Earnings per Share) x (MRQ Book Value per Share). This equation assumes that a stock is overvalued if P/E is over 15 or P/BV is over 1.5. Here are the top eight stocks, sorted by potential upside to target price: finance.yahoo.com ------------------------------------------------------------------------------------- Denbury Resources, Inc. (NYSE: DNR) is one I recently bought. Graham Value for DNR = Square Root (22.5)x(1.32)x(12.37) = 19.16 ( Current Price $15.00) Graham Value for TITN = Square Root (22.5)x(1.87)x(15.43) = 25.48 (Current Price $ 21.08) Any others in the group pop out as possible value candidates? EKS

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