Ryan Freund, a Value Investing Blogger, has shared with us some of the key attributes that Benjamin Graham, and Warren Buffett, uses when narrowing down their universe of stocks. I have provided the 6 attributes by Graham, but check out Freund Investing to see their changes to his methodology based on the current market.
1. Price-to-book (P/B) ratio (also known as Net Asset Value and Net Tangible Assets) of less than 1.5.
2. Earnings per share (EPS) should have grown by 33% in the past 10 years.
3. The price-to-earnings (ttm) ratio should be below 15.
4. The current ratio should be below 1.5.
5. The company should pay out a dividend.
6. Price of the stock divided by the P/B should less than 1.2.
Based on a screen with these metrics, FI came up with 15 stocks you should look at. But, as Ryan mentions, this is not an endorsement to buy, but rather a good way to narrow down your research.
# Everest Re Grp Lt. (NYSE: RE)
# Nationwide Fin Sv (NYSE: NFS)
# Ashland Inc. (NYSE: ASH)
# Omnicare Inc. (NYSE: OCR)
# Protective Life (NYSE: PL)
# Odyssey Re Holdings (NYSE: ORH)
# Industrios Bachoc (NYSE: IBA)
# Ares Capital Corp. (NasdaqGS: ARCC)
# Kelly Svcs (NasdaqGS: KELYA)
# Encore Wire (NasdaqGS: WIRE)
# Agilysis Inc. (NasdaqGS: AGYS)
# One Liberty Group (NYSE: OLP)
# Nymagic Inc. (NYSE: NYM)
# L.S. Starrett Co. (NYSE: SCX)
# Ecology Environment Inc. (AMEX: EEI)