Benjamin Graham established the foundation of value investing by developing systematic methods for identifying underpriced securities—concepts that continue to guide today’s investors. His most notable student, Warren Buffett, demonstrates how Graham’s principles can create lasting wealth. Graham’s approach centers on discovering established, profitable companies trading below their intrinsic value while avoiding risky, speculative ventures.
Fundamental Investment Philosophy
Graham preferred companies with proven track records rather than those relying on hopeful future projections. This conservative approach emphasizes protecting capital by identifying significant differences between a stock’s market price and its underlying asset value—what Graham termed the “margin of safety.”
How Validea Applies Graham’s Methods
Validea has transformed Graham’s investment philosophy into a structured evaluation system that analyzes potential investments across four main areas:
Company Fundamentals
The screening process requires companies to achieve annual revenues of at least $340 million, ensuring adequate business size. Candidates must demonstrate consistent profitability over five consecutive years and typically operate in established, stable sectors rather than emerging technology fields.
Financial Strength
Strong financial health is essential, with current assets exceeding current liabilities by a minimum 2:1 ratio. Additionally, working capital must surpass the company’s total long-term debt obligations.
Growth and Consistency
Companies must show earnings growth of at least 30% over ten years. To minimize short-term fluctuations, the system examines three-year average earnings rather than single-year results.
Valuation Measures
The methodology requires three-year average price-to-earnings ratios to remain below 15. The combined price-to-earnings and price-to-book ratios cannot exceed 22, ensuring reasonable purchase prices relative to business fundamentals.
Discover how Validea’s models can help you identify high-quality, long-term investments, even in changing market conditions. Visit Validea.com to access in-depth stock analysis and tools designed to emulate proven investment principles. Take a Free Trial Today!
Here are the top 10 stocks using Validea’s Benjamin Graham strategy for September of 2025.
| Ticker | Company Name | Value Investor | Price | Market Cap ($mil) | PE Ratio | Price/ Sales | Relative Strength | Price/ Book | Price/ Cash Flow | Dividend Yield |
|---|---|---|---|---|---|---|---|---|---|---|
| BCC | BOISE CASCADE CO | 100 | $77.73 | $2,902 | 11.4 | 0.4 | 20 | 1.4 | 7.0 | 0.8% |
| BG | BUNGE GLOBAL SA | 100 | $78.99 | $15,803 | 7.9 | 0.3 | 34 | 1.0 | 8.3 | 3.5% |
| CALM | CAL-MAINE FOODS INC | 100 | $97.22 | $4,715 | 3.9 | 1.1 | 75 | 1.8 | 3.6 | 7.0% |
| SCVL | SHOE CARNIVAL INC | 100 | $22.08 | $604 | 9.7 | 0.5 | 18 | 0.9 | 6.4 | 2.6% |
| UVV | UNIVERSAL CORP | 100 | $54.84 | $1,365 | 13.3 | 0.5 | 58 | 0.9 | 7.2 | 5.9% |
| WB | WEIBO CORP (ADR) | 100 | $12.52 | $3,015 | 8.8 | 1.7 | 81 | 0.9 | 6.9 | 6.6% |
| WGO | WINNEBAGO INDUSTRIES INC | 86 | $34.60 | $970 | 0.4 | 22 | 0.8 | 21.8 | 3.8% | |
| WLK | WESTLAKE CORP | 86 | $78.88 | $10,116 | 0.9 | 19 | 1.0 | 9.1 | 2.7% | |
| TNK | TEEKAY TANKERS LTD | 86 | $53.70 | $1,854 | 6.4 | 1.8 | 46 | 1.0 | 4.9 | 1.9% |
| TS | TENARIS SA (ADR) | 86 | $34.68 | $19,157 | 9.4 | 1.6 | 66 | 1.1 | 7.2 | 0.0% |
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