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 (2024-05-16), the stock price of Red Trail Energy LLC is $3.80. Red Trail Energy LLC's graham number for the quarter that ended in Dec. 2023 was $2.52. Therefore, Red Trail Energy LLC's Price to Graham Number ratio for today is 1.51.
The historical rank and industry rank for Red Trail Energy LLC's Graham Number or its related term are showing as below:
REGX'
s Price-to-Graham-Number Range Over the Past 10 Years
Min: 0.18 Med: 0.45 Max: 1.55
Current: 1.51
During the past 13 years, the highest Price to Graham Number ratio of Red Trail Energy LLC was 1.55. The lowest was 0.18. And the median was 0.45.
REGX's Price-to-Graham-Number is not ranked
in the Chemicals industry.
Industry Median: 1.5
vs REGX: 1.51
Graham Number is a combination of asset valuation and earnings power valuation. It is a very conservative way of valuing a stock.
Red Trail Energy LLC Graham Number Historical Data
The historical data trend for Red Trail Energy LLC'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 Red Trail Energy LLC's Graham Number
For the Chemicals subindustry, Red Trail Energy LLC'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.
Red Trail Energy LLC's Price-to-Graham-Number Distribution in the Chemicals Industry
For the Chemicals industry and Basic Materials sector, Red Trail Energy LLC's Price-to-Graham-Number distribution charts can be found below:
* The bar in red indicates where Red Trail Energy LLC's Price-to-Graham-Number falls into.
Red Trail Energy LLC Graham Number Calculation
Graham Number is a concept based on Ben Graham's conservative valuation of companies.
Red Trail Energy LLC's Graham Number for the fiscal year that ended in Sep. 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.
Red Trail Energy LLC (OTCPK:REGX) 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.
Red Trail Energy LLC's Price to Graham number Ratio for today is calculated as
Price to Graham number
=
Share Price (Today)
/
Graham number (Q: Dec. 2023 )
=
3.80
/
2.52
=
1.51
* 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.
Red Trail Energy LLC Graham Number Related Terms
Thank you for viewing the detailed overview of Red Trail Energy LLC's Graham Number provided by GuruFocus.com. Please click on the following links to see related term pages.
Red Trail Energy LLC (Red Trail Energy LLC) Business Description
Red Trail Energy LLC is USA based firm engaged in constructing, owning, and operating a fuel-grade ethanol plant near Richardton, North Dakota in western North Dakota. The company's product offering includes ethanol, distillers' grains, and corn oil.
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