"Benjamin Graham has been recognized for decades as the father of value investing; Warren Buffett was a student of Ben Graham at Columbia University and later worked for Mr. Graham for several years," notes J. Royden Ward.

The editor of the Cabot Benjamin Graham Value Letter explains, "We've combined Warren Buffett's and Ben Graham's investing criteria for choosing stocks and and found six high-quality companies.

"We believe that the six stocks that passed our screen each sell at sensible prices, offer reasonable appreciation potential, and provide solid dividends.

Continue reading Double Values: 6 Stocks That Meet Buffett and Graham Criteria

Double Values: 6 Stocks That Meet Buffett and Graham Criteria originally appeared on BloggingStocks on Fri, 25 Mar 2011 11:00:00 EST. Please see our terms for use of feeds.

"We screened the Investors Business Daily (IBD) and Zacks databases to find companies whose earnings are accelerating and whose earnings estimates are being increased by analysts," says J. Royden Ward.

The editor of the Cabot Benjamin Graham Value Letter continues, "All of the stocks in our list have IBD Composite Ratings of 95 (99 is best) and Zacks Ratings of 1 or 2 (1 is best). These recommendations offer excellent appreciation potential with moderate risk.

Continue reading Ben Graham-Style Techs with Rising Estimates

Ben Graham-Style Techs with Rising Estimates originally appeared on BloggingStocks on Tue, 08 Mar 2011 11:00:00 EST. Please see our terms for use of feeds.

"Is Apple ((AAPL) undervalued? We expect the company's earnings to grow at a rapid 24% pace during the next five years," says J. Royden Ward who believe the tech stock meets the criteria for a long-term value investment.

The editor of Cabot Benjamin Graham Value Letter explains, "At 14.7 times our one-year forward EPS estimate, shares are clearly undervalued. Indeed, we consider AAPL to be low risk.

"Apple develops, manufactures and markets personal computers and consumer electronic products. Exciting new products portend continued rapid growth in future years.

Continue reading Would Ben Graham Buy Apple (AAPL)?

Would Ben Graham Buy Apple (AAPL)? originally appeared on BloggingStocks on Mon, 14 Feb 2011 10:20:00 EST. Please see our terms for use of feeds.

The editor of Validea explains, "Atwood Oceanics (ATW), a Houston-based offshore oil drilling firm, gets strong interest from both my Benjamin Graham- and Peter Lynch-inspired strategie.

"With a $2.4 billion market cap. Atwood has been a big winner for one of my most stringent -- and most successful -- strategies, the model I base on the writings of the late Benjamin Graham.

Continue reading Atwood Oceanics (ATW): 'Under the Radar'

Atwood Oceanics (ATW): 'Under the Radar' originally appeared on BloggingStocks on Wed, 02 Feb 2011 10:30:00 EST. Please see our terms for use of feeds.

This post is one in a series in which more than 60 newsletter advisors share their Top Stock Picks for 2011. This special report is courtesy of TheStockAdvisors.com.

"Arrow Electronics (ARW) s a classic value stock with low price-to-earnings and price-to-book value ratios. Founded in 1935 and based in Melville, New York," notes J. Royden Ward.

The editor of the Cabot Benjamin Graham Value Letter explains, "Arrow is the second largest distributor of electronic components and computer products, serving 900 suppliers throughout North America, Europe and Asia.

Continue reading Top Picks 2011: Arrow Electronics (ARW)

Top Picks 2011: Arrow Electronics (ARW) originally appeared on BloggingStocks on Tue, 28 Dec 2010 13:00:00 EST. Please see our terms for use of feeds.

This series started with five major defense contractors and six major oil companies that are worthy considerations to help your portfolio survive a global crisis (see Chasing Value: You Must Own Defense and Oil for Safety). After the first review, one stock was eliminated from consideration: Petroleo Brasileiro (PBR). The reason is in the first story.

Today we continue our analysis by examining price-to-book (P/B), price-to-cash-flow (P/CF), and dividend yield. Each stock is ranked by sector and metric from best to worst. In the end we hope to narrow down our choices for candidates that might be added to Chasing Value: 2011 Stock Picks -- The Journey Begins.

Continue reading Chasing Value: Defense and Oil -- Part 2

Chasing Value: Defense and Oil -- Part 2 originally appeared on BloggingStocks on Wed, 15 Dec 2010 12:00:00 EST. Please see our terms for use of feeds.

"Research In Motion (RIMM) is clearly undervalued at 9.7 times forward EPS; investor's concerns regarding the intense competition in the smart phone market have caused the stock price to decline 26% during the past seven months," says value investor J. Royden Ward.

The editor of Cabot Benjamin Graham Value Letter explains, "We believe exciting new product introductions will boost sales and earnings growth more than expected during the next couple of years.

Continue reading Research In Motion (RIMM): A 'Ben Graham' Value Buy

Research In Motion (RIMM): A 'Ben Graham' Value Buy originally appeared on BloggingStocks on Wed, 17 Nov 2010 10:30:00 EST. Please see our terms for use of feeds.

The editor of Validea continues, "Sanofi-Aventis (SNY), which is involved in pharmaceuticals and human vaccines, earns a Guru Score of 100% based on the value investing strategy of Benjamin Graham.

"In its pharmaceutical activity, the company specializes in six therapeutic areas: diabetes, oncology, thrombosis and cardiovascular, central nervous system (CNS), and internal medicine.

Continue reading Sanofi-Aventis (SNY): A Ben Graham Value Buy

Sanofi-Aventis (SNY): A Ben Graham Value Buy originally appeared on BloggingStocks on Mon, 25 Oct 2010 11:00:00 EST. Please see our terms for use of feeds.

Having accepted a speaking engagement at a university school of business recently, I had to think about what introductory information I could impart to the students about investing that would be practical, immediately useful and establish a foundation for whatever direction their paths might lead. This was supposed to be the first in a series. However, since I pull no punches and can be a little edgy in my candor and presentation, who knew if I would be invited back?

My outline had five basic elements. The first thing I told them was to start now!

Continue reading Chasing Value: Class Is in Session -- Where to Start

Chasing Value: Class Is in Session -- Where to Start originally appeared on BloggingStocks on Mon, 13 Sep 2010 13:00:00 EST. Please see our terms for use of feeds.

"Two newcomers to our recommended list come from a sector still dogged by fears -- the financial sector; and interestingly, both specialize in a bit of an unusual type of finance: pawn loans," says John Reese.

Here, the editor of Validea -- which focuses on stocks that meet the investment criteria of some of the market's most successful professional investors -- offers a bullish review of EZCorp (EZPW) and Cash America International (CSH).

"Cash America gets approval from my James O'Shaughnessy-based strategy -- as well as from my Benjamin Graham value investing model.

Continue reading Pawn Power: EZCorp (EZPW) and Cash America (CSH)

Pawn Power: EZCorp (EZPW) and Cash America (CSH) originally appeared on BloggingStocks on Fri, 27 Aug 2010 10:30:00 EST. Please see our terms for use of feeds.

"Investing in conservative stocks to build or rebuild the core of your portfolio makes sense right now; investors should buy companies that have a long history of steady earnings and dividend growth, through good times and tough times," says J. Royden Ward.

The editor of the specialty newsletter, Cabot Benjamin Graham Value Letter, explains, "The obvious benefit of adhering to a disciplined system of value investing like ours is that you build long-term profits and, ideally, financial independence.

Continue reading Ben Graham Values: Ten Conservative Growth and Income Ideas

Ben Graham Values: Ten Conservative Growth and Income Ideas originally appeared on BloggingStocks on Wed, 28 Jul 2010 10:00:00 EST. Please see our terms for use of feeds.

In his Validea newsletter and his just published book Guru Strategies, stock advisor John Reese assesses companies based on the investment strategies of "legendary investors" such as Ben Graham and Warren Buffett.

Recently, the advisor has highlighted two retailers that pass his guru screens: Gildan Activewear (NYSE: GIL) and Jos. A. Bank Clothiers (NASDAQ: JOSB). Here's his contrarian look at the two out-of-favor firms.

"You might never have heard Gildan Activewear, a Montreal-based clothing manufacturer, but you may well have worn its products. Gildan sells T-shirts, sport shirts and fleece to wholesale distributors as 'blanks' -- that is, without logos or decorating. Screen printers then decorate the items with various designs and logos.

Continue reading Guru strategies pick apparel retailers

Guru strategies pick apparel retailers originally appeared on BloggingStocks on Wed, 18 Mar 2009 10:30:00 EST. Please see our terms for use of feeds.

In The Cabot Benjamin Graham Value Letter -- which assesses stocks based on Graham's value investing critera, editor J. Royden Ward takes a look at Wal-Mart Stores (NYSE: WMT).

"In this month's Classic Benjamin Graham Value Model, our calculation suggests that the Dow is overvalued at 12,370 and undervalued at 8,305; as such, today the market is extremely undervalued.

"This low-risk environment means it's probably a great time to add risk by dabbling in our recommended stocks such as Wal-Mart Stores.

"How cheap is it? The recent decline in WMT shares has created an outstanding buying opportunity for investors. WMT shares now sell at only 12.3 times forward EPS with a dividend yield of 2.0%.

Continue reading Is Wal-Mart (WMT) now a value stock?

Is Wal-Mart (WMT) now a value stock? originally appeared on BloggingStocks on Thu, 26 Feb 2009 09:45:00 EST. Please see our terms for use of feeds.

"Jos. A. Bank Clothiers, Inc. (NASDAQ: JOSB) matches the value criteria used by our Benjamin Graham stock screening model by 100%," suggests John Reese.

In his Validea newsletter, he assesses stocks based on the strategies of numerous "legendary" stock market investors. Here's his review of the apparel retailing chain.

"Jos. A. Bank is a designer, retailer and direct marketer of men's tailored and casual clothing and accessories through stores, catalog and Internet.

"The company sells substantially all of its products exclusively under the Jos. A. Bank label through its 422 retail stores, as well as through the company's nationwide catalog and Internet operations.

"Our Ben Graham stock selection model requires that the current ratio must be greater than or equal to 2. Companies that meet this criterion are typically financially secure and defensive. JOSB's current ratio of 2.81 passes the test.

Continue reading Jos. A Bank (JOSB): Shopping for value

Jos. A Bank (JOSB): Shopping for value originally appeared on BloggingStocks on Mon, 15 Dec 2008 14:20:00 EST. Please see our terms for use of feeds.

In his Hidden Values Alert, value investor Charles Mizrahi discusses three rules for "thriving during a panic". This in-depth, common sense review is must reading for serious investors. (For 10 specific stock ideas that meet value investing criteria, see our other post on a Benjamin Graham-type portfolio.)

"Warren Buffett once said, 'You don't know who's swimming naked until the tide goes out.' In the past year the tide was rapidly going out, and it exposed a lot of naked swimmers.

"The impact of the credit crunch continued to find its way into other asset classes. Correlations that investors held dear, namely that price movements in one global market would behave differently than price movements in another global market, became unglued.

"The past year has seen global markets move in lockstep with each other, providing investors no safe haven.

"Investors couldn't even hang their hats on diversification among different sectors. It is during periods of panic that all markets and sectors correlate in the same direction...down. Investors both institutional and retail acted in a similar manner: they froze.

"They began to sell assets, many times without regard to the underlying value of the asset. In order to raise cash for redemptions, hedge funds sold what they could, not always what they wanted.

"When stock market participants focus on the short term, employ leverage and need to liquefy their holdings, the table is set for the value investor.

"Indeed, it is during times of panic that value investors plant the seeds of future market-beating returns. While most investors are caught like deer in headlights as great companies are offered at bargain prices, value investors act.

Continue reading Three rules for value investors

Three rules for value investors originally appeared on BloggingStocks on Fri, 24 Oct 2008 15:00:00 EST. Please see our terms for use of feeds.

In his Half-Priced Stocks newsletter, value investor Nathan Slaughter recently assessed stocks based on the general investment philosophy of Benjamin Graham, the noted value investor under whom Warren Buffett studied.

One issue that stands out in his view is Cabela's (NYSE: CAB), one of the world's largest specialty retailers of hunting and fishing gear, camping equipment, and outdoor apparel.

"The cornerstone to Graham's success and his enduring legacy to value investors was his 'margin of safety' concept. Specifically, he would take a hard look at dividend yields, price-to-book ratios, and other key metrics.

"Cabela's originated as a direct marketer and once primarily sold its products via catalog, but has since augmented that distribution channel with e-commerce operations and a growing chain of nearly 30 stores spread throughout 19 states.

Continue reading Cabela's (CAB): 'Sporting gains' from Ben Graham-style buy

Cabela's (CAB): 'Sporting gains' from Ben Graham-style buy originally appeared on BloggingStocks on Wed, 28 May 2008 11:43:00 EST. Please see our terms for use of feeds.

Fiscally cautious CEOs now sittin' pretty originally appeared on BloggingStocks on Tue, 09 Oct 2007 17:26:00 EST. Please see our terms for use of feeds.

Value traps look like value stocks, but they don't go up. Often this is because the fundamentals of the business decline along with the share-price: the shares get cheaper as the business declines in value. The article talks about ways to avoid these stocks, and how find real value stocks.

There's a different kind of value stock: Companies that are tightly held, have no volume, and have share prices that don't seem to budge. Generally these are companies that are so tightly-controlled that they are almost private companies. Oftentimes, they can be run for the benefit of management rather than the stockholders and, with such a huge portion of the stock held by insiders, there's little that any activist investor or hedge fund can do.

Those of us who look for really cheap stocks, like micro-cap net-nets, have to be especially careful of this. When looking at really cheap stocks, make sure that there are incentives and options in place for value to be unlocked. If there aren't, keep looking.

Is that a value stock or a value trap? originally appeared on BloggingStocks on Tue, 19 Jun 2007 17:46:00 EST. Please see our terms for use of feeds.

The price-to-book value of a company is very important to value investors. It was a major theme in Benjamin Graham's book the Intelligent Investor and it has been very important to Warren Buffett throughout his investing career. Buffett has stated repeatedly that his number one investment rule is to not lose money and that his #2 rule is to remember rule #1.

When considering the purchase of shares in a company, knowing the book value or underlying value, minus any "good will," gives you a foundation on which to place some confidence. The book value is not the same thing as the break-up value of a company, which might be more or less, but they do have a relationship. The most important thing about understanding the book value is to have some idea of what the company is worth in a "fire sale." What is the company worth in its lowest common denominator. Ideally you want to pay something less than, or close to a book value of 1.0. Stocks with very high P/B ratios imply many intangibles and a higher degree of speculation in the stock price.

Continue reading Serious Money: The page on Buffett -- Part III: Price-to-book

Serious Money: The page on Buffett -- Part III: Price-to-book originally appeared on BloggingStocks on Wed, 30 May 2007 16:30:00 EST. Please see our terms for use of feeds.

In his column "The Intelligent Investor" in the latest issue of Money Magazine, Jason Zweig offers some great tips for investors to "Stop worrying and stay invested" in the presence of a volatile markets. He also gives one of the best pieces of advice for trading that I have ever seen: "Wait for the bell. If the market is open, your portfolio should be closed. Later you can be more objective."

Don't worry about missing opportunities: All the research shows that frequent trading kills performance. Trading during the day will trick you into making impulsive investments, and make your regimen more gambler than cerebral. This also goes nicely with one of the best investing quotes of the year, from John Bogle's interview with the same magazine in March: "The stock market turns out to be a giant distraction from the reality of owning businesses, which is what investing really is. In the short run, expectations seem to drive the market, but in the long run nearly 100% of the returns on stocks come from the real market - the sum of dividend yield and earnings growth."

Zweig's advice is certainly something I plan to incorporate into my own investing. For more great insight from Zweig, buy the most recent edition of Benjamin Graham's classic book The Intelligent Investor, which has timely commentary from Zweig following each chapter.

Zweig: Don't trade when the market's open originally appeared on BloggingStocks on Mon, 16 Apr 2007 20:00:00 EST. Please see our terms for use of feeds.