– By Alberto Abaterusso
Benjamin Graham, the father of value investing and author of “The Intelligent Investor,” advised value investors to screen for stocks whose “Graham blended multiplier” stood below 22.5. Such stocks could be trading at a discount to their intrinsic value, enhancing the likelihood to come across value opportunities. The Graham blended multiplier is the price-earnings ratio multiplied by the price-book ratio.
Thus, value investors may want to consider the following three stocks, as their Graham blended multipliers stand below 22.5.
Leju Holdings Ltd
The first stock to consider is Leju Holdings Ltd (NYSE:LEJU), a Chinese provider of online to offline (O2O) real estate services to consumers in the People’s Republic of China.
The stock has a Graham blended multiplier of 14.2 as the price-earnings ratio is 12.88 (versus the industry median of 12.39) and the price-book ratio is 1.1 (versus the industry median of 0.8).