Benjamin Graham established the foundation of value investing by developing systematic approaches to identify undervalued stocks that continue to guide investors today. Warren Buffett, his most renowned student, demonstrates how Graham’s principles can create lasting wealth. Graham’s approach centers on discovering stable, established companies trading below their intrinsic value while avoiding speculative, untested ventures.
Fundamental Investment Philosophy
Graham emphasized companies with proven track records rather than those relying on hopeful forecasts. This conservative approach focuses on protecting capital by finding significant discrepancies between market price and true asset value—what he termed the “margin of safety.”
How Validea Applies Graham’s Framework
Validea has transformed Graham’s investment philosophy into a structured evaluation system that assesses potential investments across four essential areas:
Corporate Fundamentals
The screening process requires companies to achieve minimum annual revenues of $340 million, ensuring adequate business scale. Candidates must also demonstrate consistent profitability over five consecutive years and typically operate in mature, established sectors rather than emerging technology fields.
Financial Strength
Strong balance sheets are essential, with current assets exceeding current liabilities by a 2-to-1 margin. Additionally, working capital must surpass the company’s total long-term debt obligations.
Growth and Consistency
Companies must show earnings growth of at least 30% over a ten-year period. To account for temporary fluctuations, the system evaluates three-year average profits rather than single-year results.
Valuation Standards
The methodology requires the three-year average price-to-earnings ratio to remain below 15. Furthermore, the combined price-to-earnings and price-to-book ratios cannot exceed 22, ensuring reasonable purchase prices relative to company fundamentals.
Discover how Validea’s models can help you identify high-quality, long-term investments, even in changing market conditions. Visit Validea.com to access in-depth stock analysis and tools designed to emulate proven investment principles. Take a Free Trial Today!
Here are the top 10 stocks using Validea’s Benjamin Graham strategy for July of 2025.
| Ticker | Company Name | Value Investor | Price | Market Cap ($mil) | PE Ratio | Price/ Sales | Relative Strength | Price/ Book | Price/ Cash Flow | Dividend Yield |
|---|---|---|---|---|---|---|---|---|---|---|
| BCC | BOISE CASCADE CO | 100 | $83.89 | $3,157 | 10.5 | 0.5 | 29 | 1.5 | 6.9 | 0.8% |
| BG | BUNGE GLOBAL SA | 100 | $74.42 | $10,002 | 9.4 | 0.2 | 29 | 1.0 | 6.2 | 3.7% |
| MLR | MILLER INDUSTRIES INC | 100 | $42.33 | $485 | 9.0 | 0.4 | 30 | 1.2 | 7.0 | 1.8% |
| SCVL | SHOE CARNIVAL INC | 100 | $20.22 | $553 | 8.5 | 0.5 | 22 | 0.9 | 5.7 | 2.7% |
| UVV | UNIVERSAL CORP | 100 | $54.47 | $1,351 | 14.4 | 0.5 | 64 | 0.9 | 7.8 | 5.9% |
| WB | WEIBO CORP (ADR) | 100 | $10.24 | $2,495 | 7.4 | 1.4 | 79 | 0.7 | 5.9 | 0.0% |
| WGO | WINNEBAGO INDUSTRIES INC | 86 | $29.62 | $830 | 0.3 | 22 | 0.7 | 18.7 | 4.4% | |
| UTHR | UNITED THERAPEUTICS CORP | 86 | $292.01 | $13,172 | 11.6 | 4.4 | 45 | 1.9 | 10.2 | 0.0% |
| SQM | SOCIEDAD QUIMICA Y MINR DE CHILE SA(ADR) | 86 | $38.68 | $10,925 | 6.4 | 2.4 | 52 | 2.1 | 5.2 | 0.0% |
| TK | TEEKAY CORP LTD | 86 | $7.58 | $633 | 5.3 | 0.5 | 73 | 0.9 | 1.3 | 0.0% |
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