Validea’s Ben Graham strategy is based on the value investing approach pioneered by Benjamin Graham, often called the “Father of Value Investing”. This strategy aims to identify undervalued stocks by focusing on companies with strong financial positions and consistent earnings. The approach uses strict criteria to select stocks, emphasizing safety and value over growth potential.
The strategy employs several key financial metrics to evaluate potential investments. These include a minimum market capitalization, a strong current ratio (indicating good short-term liquidity), no earnings deficits in the past five years, and a low price to earnings and price to book ratio. Additionally, the strategy looks for companies with long-term debt less than net current assets and steady earnings growth,
One of the distinguishing features of Validea’s interpretation of Graham’s strategy is its stringent selection criteria. This results in a relatively small number of stocks passing all the filters, which aligns with Graham’s belief in concentrated portfolios of carefully selected value stocks. The strategy is designed to identify financially sound companies trading at a discount to their intrinsic value, with the expectation that the market will eventually recognize this value, leading to price appreciation.
Here are the top 10 stocks using Validea’s Benjamin Graham strategy for September of 2024.
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