A Look Back: Ben Graham Nuggets Trounce The Market

Over the last year and few months I wrote a couple of posts high lighting the famous value investor Ben Graham titled "A Few More Ben Graham Nuggets" and "Ben Graham Nuggets Part 2". Both post high lighted a basket of seven stocks, notice the number... "7"... Lucky number seven (ha ha).

For those not familiar with Ben Graham, here is a quick catch up. Graham is considered the Father of security analysis and value investing as practiced by many value investors today. He wrote two best selling books "Security Analysis" (1934) and "The Intelligent Investor" (1949) that are still in print today. He also ran a money management firm called Graham- Newman and taught at Columbia Business School. Among some of Grahams disciples are Walter Schloss, Irving Kahn and the most famous Warren Buffett.

All the issues mentioned met the following criteria:

• Current ratio of 1.5 or better
• A Book Value of 1.5 or less
• A p/e ratio under 15
• Positive eps growth over last 5 years
• Very low or NO debt
• Pay a dividend

These are not dyed- in- the- wool Ben Graham screening techniques, but rather based on Graham's many years of teaching, writing, and investing. However these 14 stocks mentioned fall under bargain issues. Their are many ways for screening when searching for value stocks, such as earnigs yield used by Joel Greenblatt of Gotham Capital and "The Little Book That Beats The Market". Their is also CROIC (cash return on invested capital) coined by Joe Ponzio over at FWallStreet.

Company	Ticker Symbol	Closing price on Oct 30Th 2008 $	Closing price on March 24Th 2010 $	Cumulative Return
Abercrombie & Fitch	ANF	27.06	44.38	+64.01%
Ashland	ASH	21.98	53.43	+143.08%
Bel Fuse	BELFB	18.70	22.04	+17.86%
Movado Group	MOV	14.29	11.79	-17.49%
Nam Tai Electronics	NTE	7.28	4.91	-32.55%
Seaboard Corp	SEB	1098.00	1389.75	+26.57%
Thor Industries	THO	17.50	31.78	+81.60%
			Total Cumulative Return Graham Nuggets	+40.19% return	S&P Index cumulative return Oct 30Th 2008 thru Mar 24Th 2010 954.09-1167.72	+22.40% return

Company	Ticker Symbol	Closing price on Dec 10Th 2008 $	Closing price on March 24Th 2010 $	Cumulative Return
Intersil Corp.	ISIL	9.36	14.74	+57.48%
Lufkin Industries	LUFK	35.26	79.48	+125.41%
bebe stores	BEBE	6.64	9.40	+41.57%
Heidrick & Struggles	HSII	20.66	28.21	+36.54%
Titanium Metals	TIE	8.54	16.71	+95.67
Williams-Sonoma	WSM	8.59	27.72	+222.70%
Williams Pipeline	WMZ	14.35	30.14	+110.03
			Total Cumulative Return Graham Nuggets	+98.49% return	S&P Index cumulative return Dec 10Th 2008 thru Mar 24Th 2010 899.24- 1167.72	+29.90% return

As you can see by the results that these portfolios based on Ben Graham and Value Investing techniques smashed the market returns. Keep in mind that these techniques may be more favorable during down markets or markets with much volatility.

* returns do not take into the account of any DIVIDENDS paid out

dividends add to total return

Author currently long SEB

Ben Graham Nuggets Part 2

The Market Crash of 2008 has created many opportunities for the investor especially the most prudent of investors- the Value Investor. While many stocks look like bargains not all are. Many are value traps however many might be diamonds in the rough. One of Ben Grahams strategies while managing money during his 30 years of running "Graham-Newman Partnership" was to buy a basket of beaten down stocks . While there are many stocks currently that fit in the mold or come close to Grahams strategy here is the latest list:

All issues mentioned have a current ratio better than 1.5, a book value under 1.5, a p/e ratio under 15, positive eps growth over last 5 years, very low or no debt, and pay a dividend of at least 2 percent or better.

7 Ben Graham Nuggets

Williams Pipeline LP(WMZ)- Williams Pipeline Partners L.P. owns and operates natural gas transportation and storage assets in the United States.

Lufkin Industries(LUFK)- Lufkin Industries, Inc. and its subsidiaries engage in the manufacture and sale of oil field pumping units, power transmission products, and highway trailers.

Bebe Stores(BEBE)- bebe stores, inc. engages in the design, development, and production of womens apparel and accessories. Management holds a large stake in this one.

Heidrick &Struggles(HSII)- Heidrick & Struggles International, Inc. provides executive search and leadership consulting services in the Americas, Europe, and the Asia Pacific.

Titanium Metals(TIE)- Titanium Metals Corporation produces titanium melted and mill products.

Williams-Sonoma(WSM)- Williams-Sonoma, Inc. operates as a specialty retailer of home products.

Intersil Corporation(ISIL)- Intersil Corporation is a global technology leader specializing in the design and manufacture of high performance analog semiconductors.

More Ben Graham Nuggets here:

http://stockmanmarc.blogspot.com/2008/10/few-more-ben-graham-nuggets.html

*These are not recommendations but ideas for further study before investing.