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The Graham number or Benjamin Graham number is a figure used in securities investing that measures a stock's so-called fair value. [1] Named after Benjamin Graham , the founder of value investing , the Graham number can be calculated as follows:
Graham suggested a value investing strategy of buying a well-diversified portfolio of stocks that have a net current asset value greater than their market cap. This strategy is sometimes referred to as "cigar-butt" investing, because it tends to focus on struggling companies that are trading below their liquidation value .
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The Benjamin Graham formula is a formula for the valuation of growth stocks. It was proposed by investor and professor of Columbia University , Benjamin Graham - often referred to as the "father of value investing".
The market has changed dramatically since Benjamin Graham opined about the market in Intelligent Investor. With that in mind, I decided to take a look at what The Graham Number and Intelligent ...
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Market cap is given by the formula =, where MC is the market capitalization, N is the number of common shares outstanding, and P is the market price per common share. [ 8 ] For example, if a company has 4 million common shares outstanding and the closing price per share is $20, its market capitalization is then $80 million.
Small-cap: Companies with a market capitalization between $300 million and $3 billion In the example above, Company A with a market cap of $10 billion could be considered a mid-cap.