LGIH has been successfully added to your Stock Email Alerts list.
You can manage your stock email alerts here.
LGIH has been removed from your Stock Email Alerts list.
Please enter Portfolio Name for new portfolio.
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 (2024-05-02), the stock price of LGI Homes is $89.39. LGI Homes's graham number for the quarter that ended in Dec. 2023 was $121.71. Therefore, LGI Homes's Price to Graham Number ratio for today is 0.75.
The historical rank and industry rank for LGI Homes's Graham Number or its related term are showing as below:
During the past 13 years, the highest Price to Graham Number ratio of LGI Homes was 1.56. The lowest was 0.63. And the median was 0.97.
Graham Number is a combination of asset valuation and earnings power valuation. It is a very conservative way of valuing a stock.
The historical data trend for LGI Homes'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.
LGI Homes Annual Data | |||||||||||||||||||||
Trend | Dec14 | Dec15 | Dec16 | Dec17 | Dec18 | Dec19 | Dec20 | Dec21 | Dec22 | Dec23 | |||||||||||
Graham Number | Get a 7-Day Free Trial | 72.04 | 108.46 | 149.86 | 147.17 | 121.71 |
LGI Homes Quarterly Data | ||||||||||||||||||||
Jun19 | Sep19 | Dec19 | Mar20 | Jun20 | Sep20 | Dec20 | Mar21 | Jun21 | Sep21 | Dec21 | Mar22 | Jun22 | Sep22 | Dec22 | Mar23 | Jun23 | Sep23 | Dec23 | Mar24 | |
Graham Number | Get a 7-Day Free Trial | 136.01 | 119.48 | 114.59 | 121.71 | 119.07 |
For the Residential Construction subindustry, LGI Homes'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.
For the Homebuilding & Construction industry and Consumer Cyclical sector, LGI Homes's Price-to-Graham-Number distribution charts can be found below:
* The bar in red indicates where LGI Homes's Price-to-Graham-Number falls into.
Graham Number is a concept based on Ben Graham's conservative valuation of companies.
LGI Homes's Graham Number for the fiscal year that ended in Dec. 2023 is calculated as
Graham Number | |||||
= | sqrt of (22.5 | * | Tangible Book per Share | * | EPS without NRI) |
= | sqrt of (22.5 | * | 78.197 | * | 8.42) |
= | 121.71 |
LGI Homes's Graham Number for the quarter that ended in Dec. 2023 is calculated as
Graham Number | |||||
= | sqrt of (22.5 | * | Tangible Book per Share | * | EPS without NRI (TTM)) |
= | sqrt of (22.5 | * | 78.197 | * | 8) |
= | 118.64 |
* 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.
LGI Homes (NAS:LGIH) 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.
LGI Homes's Price to Graham number Ratio for today is calculated as
Price to Graham number | = | Share Price (Today) | / | Graham number (Q: Dec. 2023 ) |
= | 89.39 | / | 118.64 | |
= | 0.75 |
* 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.
Thank you for viewing the detailed overview of LGI Homes's Graham Number provided by GuruFocus.com. Please click on the following links to see related term pages.
Steven Randal Smith | director | 1450 LAKE ROBBINS DRIVE, SUITE 430, THE WOODLANDS TX 77380 |
Michael Larry Snider | officer: See Remarks | 1450 LAKE ROBBINS DRIVE, SUITE 430, THE WOODLANDS TX 77380 |
Eric Thomas Lipar | director, 10 percent owner, officer: Chief Executive Officer | 1450 LAKE ROBBINS DRIVE, SUITE 430, THE WOODLANDS TX 77380 |
Scott James Garber | officer: General Counsel and Secretary | 1450 LAKE ROBBINS DRIVE SUITE 430, THE WOODLANDS TX 77380 |
Ryan Edone | director | 1450 LAKE ROBBINS DRIVE, SUITE 430, THE WOODLANDS X1 77380 |
Maria Renna Sharpe | director | 11 EDWARDS COURT, MT. KISCO NY 10549 |
Charles Michael Merdian | director | 1450 LAKE ROBBINS DRIVE, SUITE 430, THE WOODLANDS TX 77380 |
Rachel Lyons Eaton | officer: Chief Marketing Officer | 1450 LAKE ROBBINS DRIVE, SUITE 430, THE WOODLANDS TX 77380 |
Jack Anthony Lipar | officer: See Remarks | 1450 LAKE ROBBINS DRIVE, SUITE 430, THE WOODLANDS TX 77380 |
Shailee Parikh | director | 27 N. ABERDEEN ST., UNIT 4S, CHICAGO IL 60607 |
Duncan S Gage | director | 1450 LAKE ROBBINS DRIVE, SUITE 430, THE WOODLANDS TX 77380 |
Robert Karnig Vahradian | director | 1450 LAKE ROBBINS DRIVE, SUITE 430, THE WOODLANDS TX 77380 |
Bryan Christopher Sansbury | director | 1450 LAKE ROBBINS DRIVE, SUITE 430, THE WOODLANDS TX 77380 |
Laura Marie Miller | director | 320 QUIET WATER LANE, ATLANTA GA 30350 |
Margaret Mary Britton | officer: Chief Administrative Officer | 1450 LAKE ROBBINS DRIVE, SUITE 430, THE WOODLANDS TX 77380 |
From GuruFocus
By Marketwired • 08-24-2023
By Marketwired • 09-26-2023
By Marketwired • 08-03-2023
By Marketwired • 09-18-2023
By Marketwired • 09-06-2023
By Marketwired • 07-27-2023
By Marketwired • 09-18-2023
By GlobeNewswire • 11-03-2023
By GuruFocus Research • 10-05-2023
By Marketwired • 08-28-2023
Disclaimers: GuruFocus.com is not operated by a broker or a dealer. It has an affiliated registered investment adviser, which serves as the subadviser to an exchange traded fund. This investment adviser does not provide advice to individual investors. Under no circumstances does any information posted on GuruFocus.com represent a recommendation to buy or sell a security. The information on this site, and in its related newsletters, is not intended to be, nor does it constitute investment advice or recommendations. The individuals or entities selected as "gurus" may buy and sell securities before and after any particular article and report and information herein is published, with respect to the securities discussed in any article and report posted herein. Gurus may be added or dropped from the GuruFocus site at any time. In no event shall GuruFocus.com be liable to any member, guest or third party for any damages of any kind arising out of the use of any content or other material published or available on GuruFocus.com, or relating to the use of, or inability to use, GuruFocus.com or any content, including, without limitation, any investment losses, lost profits, lost opportunity, special, incidental, indirect, consequential or punitive damages. Past performance is a poor indicator of future performance. The information on this site, and in its related newsletters, is not intended to be, nor does it constitute investment advice or recommendations. The information on this site is in no way guaranteed for completeness, accuracy or in any other way. The gurus listed in this website are not affiliated with GuruFocus.com, LLC. Stock quotes provided by InterActive Data. Fundamental company data provided by Morningstar, updated daily.