TSX:GRT.UN - Post Discussion
Post by
retiredcf on Nov 07, 2021 4:32pm
Ben Graham
Courtesy of Torontojay. GLTA
For many years Ive always been intrigued by Graham's criteria for investing. Every now and then I would add a pick or two from this short list to include in my portfolio. If one wants additional diversification then it's best to include some American companies as well. The results over the years have been impressive.
Ben Graham criteria ( a Norm Rothery modification)
1) price to earnings less 15
2) price to book less than 1.5
3) current ratio greater than 2
4) positive earnings in each of the last 5 years
5) eps growth of at least 3% over last 5 years
6) positive dividend growth over the last 5 years
7) revenue greater than $400 million
Doman building materials passes this test and is one of 2 Canadian companies to be included on the short list. The other company is Algoma Central. A few honorable mentions goes towards Exco technologies which fails the 5th criteria and Granite Reit which passes the test except for revenues being slightly below $400 million. I will be paying much attention to these companies to see how they fare in 2022.
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