In the Intelligent Investor, the classic book on Value Investing by Benjamin Graham, The Graham Multiplier is defined as the Price to Earnings Ratio multiplied by the Price to Book Ratio.
While Graham preferred defensive investors to look for companies having a PE Ratio of less than 20 and a P/B ratio of less than 1.5, the P/B component is often too restrictive.
By specifying a Graham Multiplier of less than 22.5, higher P/B stocks that trade on a very low PE multiple could still pass his screens.
| Ticker | Name | Graham Multiplier | StockRank™ |
|---|---|---|---|
| LON:EDEN | Eden Research | 0.0 | 18 |
| LON:HMSO | Hammerson | 0.0 | 41 |
| LON:PDL | Petra Diamonds | 0.0 | 25 |
| LON:PHAR | Pharos Energy | 0.0 | 88 |
| LON:TOWN | Town Centre Securities | 0.0 | 56 |