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    8 Large-Cap Basic Materials Stocks Undervalued By The Graham Number

    Tue, 03/27/2012 - 04:53 EDT - Seeking Alpha
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    By Kapitall:Do you prefer the diversification benefits that commodities can offer a stock portfolio? One way to gain exposure is with stocks of commodity-producing companies. We ran a screen on the basic materials sector for large-cap stocks, with market caps above $10 billion, and then screened for those that appear undervalued relative to the Graham Number. The Graham number is a measure of maximum fair value created by the "godfather of value investing" Benjamin Graham. It is based off of a stock's EPS and book value per share (BVPS). Graham Number = SQRT(22.5 x TTM EPS x MRQ BVPS) The equation assumes that P/E should not be higher than 15 and P/BV should not be higher than 1.5. Stocks trading well below their Graham Number may be undervalued.
    Interactive Chart: Press Play to compare changes in market cap over the last two years for the top six stocks mentioned below. AnalystComplete Story »

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