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 (2024-05-10), the stock price of Karoon Energy is A$1.895. Karoon Energy's graham number for the quarter that ended in Dec. 2023 was A$4.45. Therefore, Karoon Energy's Price to Graham Number ratio for today is 0.43.
The historical rank and industry rank for Karoon Energy's Graham Number or its related term are showing as below:
ASX:KAR'
s Price-to-Graham-Number Range Over the Past 10 Years
Min: 0.26 Med: 0.52 Max: 2.93
Current: 0.43
During the past 13 years, the highest Price to Graham Number ratio of Karoon Energy was 2.93. The lowest was 0.26. And the median was 0.52.
ASX:KAR's Price-to-Graham-Number is ranked better than 84.92% of 650
companies
in the Oil & Gas industry
Industry Median: 0.87
vs ASX:KAR: 0.43
Graham Number is a combination of asset valuation and earnings power valuation. It is a very conservative way of valuing a stock.
Karoon Energy Graham Number Historical Data
The historical data trend for Karoon Energy'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 Karoon Energy's Graham Number
For the Oil & Gas E&P subindustry, Karoon Energy'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.
Karoon Energy's Price-to-Graham-Number Distribution in the Oil & Gas Industry
For the Oil & Gas industry and Energy sector, Karoon Energy's Price-to-Graham-Number distribution charts can be found below:
* The bar in red indicates where Karoon Energy's Price-to-Graham-Number falls into.
Karoon Energy Graham Number Calculation
Graham Number is a concept based on Ben Graham's conservative valuation of companies.
Karoon Energy's Graham Number for the fiscal year that ended in Jun. 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.
Karoon Energy (ASX:KAR) 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.
Karoon Energy's Price to Graham number Ratio for today is calculated as
Price to Graham number
=
Share Price (Today)
/
Graham number (Q: Dec. 2023 )
=
1.895
/
4.45
=
0.43
* 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.
Karoon Energy Graham Number Related Terms
Thank you for viewing the detailed overview of Karoon Energy's Graham Number provided by GuruFocus.com. Please click on the following links to see related term pages.
Karoon produces around 8 million barrels of oil annually from its wholly owned Bauna field in Brazil's offshore Santos basin. The company acquired Bauna from Petrobras in 2020 and has been steadily increasing production via well interventions and new developments. Field life is approaching eight years based on proven and probable 2P reserves of 55 million barrels at end December 2022, though this excludes a further 82 million barrels in 2C contingent resources which which have potential to increase life further. We credit life of approximately 10 years, assuming partial conversion of 2C contingent resources into reserve category with drilling. There are also prospective untested targets within Karoon's permits which could potentially add further reserves in the medium term.
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