Hi there E_K_S.
Whenever I post anything which requires some form of calculation, use of formulas, etc.., I try, wherever possible, to show how I got to my answer(s) and any other references.
In my post that you referred to, regarding ADM, I went for a “Total Tangible Assets/share” value. I also posted an Investopedia link that gave the equation for how they calculated that value.
Now I’m not quite sure why I used that in order to calculate your version of the “Graham Number”. I did some digging into my stuff but I couldn’t find an explanation for my action. As we know one of the components of the Graham Number is Book Value. In your version you prefer to remove Intangibles. I can only assume that I must have thought back to what you said in the past, such as ...
Message 27877706
Anyway, based on ADM’s latest Balance Sheet, Book Value per share less Intangibles is equal to :-
(Total Assets – Total Liabilities – Intangibles)/Common Shares = (43226 – 24273 - 0)/659 = $28.76/share, as you correctly stated, seeing as ADM had no Intangibles on their latest Balance Sheet.
That gives your version of the Graham Number as = sqrt(22.5 x 1.84 x 28.76) = $34.51/share.
ADM’s latest price is $34.65, so that’s slightly higher than the $EKS.
With regard to GLW’s latest Balance Sheet, etc...
Tangible Book Value = (28595 – 7251 – 513)/1473 = $14.14/share
$EKS = sqrt(22.5 x 1.15 x 14.14) = $19.13/share > $16.36/share, GLW’s current share price. So that’s a good start.
No doubt one is also taking into account the “total Graham consideration” as expressed in ...
serenitystocks.com |
