Graham Number is a figure that measures a stock's fundamental value by taking into account the company's earnings per share and book value per share. The Graham number is the upper bound of the price range that a defensive investor should pay for the stock. According to the theory, any stock price below the Graham number is considered undervalued, and thus worth investing in.
As of today (2024-05-17), the stock price of Helia Group is A$4.09. Helia Group's graham number for the quarter that ended in Dec. 2023 was A$8.31. Therefore, Helia Group's Price to Graham Number ratio for today is 0.49.
The historical rank and industry rank for Helia Group's Graham Number or its related term are showing as below:
ASX:HLI'
s Price-to-Graham-Number Range Over the Past 10 Years
Min: 0.37 Med: 0.57 Max: 0.75
Current: 0.49
During the past 10 years, the highest Price to Graham Number ratio of Helia Group was 0.75. The lowest was 0.37. And the median was 0.57.
ASX:HLI's Price-to-Graham-Number is ranked better than 81.68% of 404
companies
in the Insurance industry
Industry Median: 0.86
vs ASX:HLI: 0.49
Graham Number is a combination of asset valuation and earnings power valuation. It is a very conservative way of valuing a stock.
Helia Group Graham Number Historical Data
The historical data trend for Helia Group's Graham Number can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Competitive Comparison of Helia Group's Graham Number
For the Insurance - Specialty subindustry, Helia Group's Price-to-Graham-Number, along with its competitors' market caps and Price-to-Graham-Number data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Helia Group's Price-to-Graham-Number Distribution in the Insurance Industry
For the Insurance industry and Financial Services sector, Helia Group's Price-to-Graham-Number distribution charts can be found below:
* The bar in red indicates where Helia Group's Price-to-Graham-Number falls into.
Helia Group Graham Number Calculation
Graham Number is a concept based on Ben Graham's conservative valuation of companies.
Helia Group's Graham Number for the fiscal year that ended in Dec. 2023 is calculated as
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Helia Group (ASX:HLI) Graham Number Explanation
Ben Graham actually did not publish a formula like this. But he wrote in The Intelligent Investor (1948 version) regarding to the criteria for purchases:
Current price should not be more than 15 times average earnings of the past three years.
Current price should not be more than 1.5 times the book value last reported. However, a multiplier of earnings below 15 could justify a correspondingly higher multiplier of assets. As a rule of thumb we suggest that the product of the multiplier times the ratio of price to book value should not exceed 22.5. (This figure corresponds to 15 times earnings and 1.5 times book value. It would admit an issue selling at only 9 times earnings and 2.5 times asset value, etc.)
Unlike valuation methods such as DCF or Discounted Earnings, the Graham number does not take growth into the valuation. Unlike the valuation methods based on book value alone, it takes into account the earnings power. Therefore, the Graham Number is a combination of asset valuation and earnings power valuation.
In general, the Graham number is a very conservative way of valuing a stock. It cannot be applied to companies with negative book values.
Helia Group's Price to Graham number Ratio for today is calculated as
Price to Graham number
=
Share Price (Today)
/
Graham number (Q: Dec. 2023 )
=
4.09
/
8.31
=
0.49
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Be Aware
Please keep these in mind:
1. Graham Number does not take growth into account. Therefore it underestimates the values of the companies that have good earnings growth. We feel that if the earnings per share grows more than 10% a year, Graham Number underestimates the value.
2. Graham Number punishes the companies that have temporarily low earnings. Therefore, an average of earnings makes more sense in the calculation of Graham Number.
3. Graham Numbers underestimates companies that are light with book.
Helia Group Graham Number Related Terms
Thank you for viewing the detailed overview of Helia Group's Graham Number provided by GuruFocus.com. Please click on the following links to see related term pages.
Helia listed on the Australian Securities Exchange in 2014 after its U.S.-based parent, Genworth Financial (NYSE: GNW), sold down its stake. It has since exited. With a history spanning over 50 years, Helia is a provider of lenders' mortgage insurance, or LMI, in Australia. In Australia, LMI is predominantly purchased on loans with a loan/value ratio, or LVR, above 80%. LMI protects a lender against a potential loss (gap) between the outstanding loan amount and sale proceeds on a delinquent loan property. LMI does not protect the borrower, however the premium is paid by the borrower. It's regulated by the Australian Prudential Regulation Authority, or APRA, which requires it to meet minimum regulatory capital requirements.
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