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6 hours ago
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5 Stocks Ben Graham Might Buy, If He Were Alive Today
August 11, 2025 -- (Maple Hill Syndicate) I wish I had known Benjamin Graham in person. Graham was a hedge-fund manager, Columbia University professor, mentor to Warren Buffett (Trades, Portfolio), author and bon vivant. He's widely considered the father of the value (bargain-hunting) school of investing. Alas, I didn't know Graham, who was born in 1894 and died in 1976. But he lives on in his books, and in the investment philosophies of dozens of money managers (including me). Once a year in this column, I attempt to guess what stocks Graham would pick if he were alive today. The average return on my Graham recommendations, over 22 years, has been 15.1%. That beats the 12.4% average return for the Standard & Poor's 500 Total Return Index over the same years. Bear in mind that my column results are hypothetical and shouldn't be confused with results I obtain for clients. Also, past performance doesn't predict the future. Graham's Method Graham's stock-selection methods are set out in his books and other writings. For this column, I use a simplified version of his criteria. To qualify as a potential Graham stock, a company must have: Debt no more than 50% of corporate net worth. A stock price that is 12 times earnings or less. A stock price that is less than a company' book value (corporate net worth per share). Today very few stocks meet these stringent criteria. I'd like to draw your attention to five of them. Mosaic The Mosaic Co. (NYSE:MOS), based in Tampa, Florida, makes fertilizer, especially potash fertilizer. Its sales fell 5% in the past year, but have averaged 7% growth over the past decade. The stock is cheap, selling for 11 times earnings and 82% of book value. One reason it's cheap is that a lot of potash is imported from Canada, and Canada is slated to face a 25% tariff under the Trump administration's trade plan. Bank OZK From Little Rock, Arkansas, comes Bank OZK (NASDAQ:OZK), a regional bank with big ambitions. A year ago, I included it among my Graham-inspired choices, and it rose 24.8%. The rise surprised many people, since Bank OZK does a lot of commercial real-estate lending, including construction loans. Ever since Covid-19 drove many people out of office buildings five years ago, commercial real estate has been poison. The loan portfolio's make-up scares me a bit, but I have a lot of faith in the bank's chief executive officer, George Gleason. Meritage Just under book value is Meritage Homes Corp. (NYSE:MTH), a mid-sized homebuilding company with headquarters in Scottsdale, Arizona. It builds homes in ten states, most of them in the sun belt. I like that service territory as the South and West is gaining population. Debt is only 36% of equity at Meritage. That should help the company navigate its way through the current downturn in home sales, which is caused mainly by high mortgage rates. Seadrill Sometimes investors love energy stocks, and sometimes they hate them. Seadrill Ltd. (NYSE:SDRL), which does offshore drilling, is untimely. No one wants to drill under the ocean when oil fetches $60 a barrel. So, Seadrill has lost money in eight of the past ten years. Its stock, down 25% this year, sells for less than it did a decade ago. But if oil hits $80 or $90 a barrel, it would be a different story. I expect that to happen in the next three years, and I like this stock at its current valuation of less than six times recent earnings. Nacco Selling for only 67% of book value is Nacco Industries Inc. (NYSE:NC). Based in Cleveland, Ohio, it's a coal mining company that is barely covered by Wall Street analysts. Nacco has shown a profit in 13 of the past 15 years, and had a good year last year. The stock sells for eight times recent earnings. Last Year The past year has been an unpleasant one for the value approach. So, it's not surprising that my Graham-inspired picks from a year ago trailed the overall market. They rose 6.6% while the Standard & Poor's 500 Total Return Index jumped 21.1%. Two stocks -- Unum Group (NYSE:UNM) and Bank OZK (NASDAQ:OZK) did well, returning 33% and 25% respectively. But G-III Apparel Group Ltd. (NASDAQ:GIII) and HF Sinclair Corp. (NYSE:DINO) had small losses, and Peabody Energy Corp. (NYSE:BTU) shed 22% of its value. In 22 years, my Graham stocks have beaten the index 14 times, and shown a profit 15 times. Disclosure: I own Meritage Homes personally and for most of my clients. John Dorfman is chairman of Dorfman Value Investments LLC in Boston, Massachusetts, and a syndicated columnist. His firm or clients may own or trade securities discussed in this column. He can be reached at jdorfman@ This article first appeared on GuruFocus. Sign in to access your portfolio
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6 hours ago
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5 Stocks Ben Graham Might Buy, If He Were Alive Today
August 11, 2025 -- (Maple Hill Syndicate) I wish I had known Benjamin Graham in person. Graham was a hedge-fund manager, Columbia University professor, mentor to Warren Buffett (Trades, Portfolio), author and bon vivant. He's widely considered the father of the value (bargain-hunting) school of investing. Alas, I didn't know Graham, who was born in 1894 and died in 1976. But he lives on in his books, and in the investment philosophies of dozens of money managers (including me). Once a year in this column, I attempt to guess what stocks Graham would pick if he were alive today. The average return on my Graham recommendations, over 22 years, has been 15.1%. That beats the 12.4% average return for the Standard & Poor's 500 Total Return Index over the same years. Bear in mind that my column results are hypothetical and shouldn't be confused with results I obtain for clients. Also, past performance doesn't predict the future. Graham's Method Graham's stock-selection methods are set out in his books and other writings. For this column, I use a simplified version of his criteria. To qualify as a potential Graham stock, a company must have: Debt no more than 50% of corporate net worth. A stock price that is 12 times earnings or less. A stock price that is less than a company' book value (corporate net worth per share). Today very few stocks meet these stringent criteria. I'd like to draw your attention to five of them. Mosaic The Mosaic Co. (NYSE:MOS), based in Tampa, Florida, makes fertilizer, especially potash fertilizer. Its sales fell 5% in the past year, but have averaged 7% growth over the past decade. The stock is cheap, selling for 11 times earnings and 82% of book value. One reason it's cheap is that a lot of potash is imported from Canada, and Canada is slated to face a 25% tariff under the Trump administration's trade plan. Bank OZK From Little Rock, Arkansas, comes Bank OZK (NASDAQ:OZK), a regional bank with big ambitions. A year ago, I included it among my Graham-inspired choices, and it rose 24.8%. The rise surprised many people, since Bank OZK does a lot of commercial real-estate lending, including construction loans. Ever since Covid-19 drove many people out of office buildings five years ago, commercial real estate has been poison. The loan portfolio's make-up scares me a bit, but I have a lot of faith in the bank's chief executive officer, George Gleason. Meritage Just under book value is Meritage Homes Corp. (NYSE:MTH), a mid-sized homebuilding company with headquarters in Scottsdale, Arizona. It builds homes in ten states, most of them in the sun belt. I like that service territory as the South and West is gaining population. Debt is only 36% of equity at Meritage. That should help the company navigate its way through the current downturn in home sales, which is caused mainly by high mortgage rates. Seadrill Sometimes investors love energy stocks, and sometimes they hate them. Seadrill Ltd. (NYSE:SDRL), which does offshore drilling, is untimely. No one wants to drill under the ocean when oil fetches $60 a barrel. So, Seadrill has lost money in eight of the past ten years. Its stock, down 25% this year, sells for less than it did a decade ago. But if oil hits $80 or $90 a barrel, it would be a different story. I expect that to happen in the next three years, and I like this stock at its current valuation of less than six times recent earnings. Nacco Selling for only 67% of book value is Nacco Industries Inc. (NYSE:NC). Based in Cleveland, Ohio, it's a coal mining company that is barely covered by Wall Street analysts. Nacco has shown a profit in 13 of the past 15 years, and had a good year last year. The stock sells for eight times recent earnings. Last Year The past year has been an unpleasant one for the value approach. So, it's not surprising that my Graham-inspired picks from a year ago trailed the overall market. They rose 6.6% while the Standard & Poor's 500 Total Return Index jumped 21.1%. Two stocks -- Unum Group (NYSE:UNM) and Bank OZK (NASDAQ:OZK) did well, returning 33% and 25% respectively. But G-III Apparel Group Ltd. (NASDAQ:GIII) and HF Sinclair Corp. (NYSE:DINO) had small losses, and Peabody Energy Corp. (NYSE:BTU) shed 22% of its value. In 22 years, my Graham stocks have beaten the index 14 times, and shown a profit 15 times. Disclosure: I own Meritage Homes personally and for most of my clients. John Dorfman is chairman of Dorfman Value Investments LLC in Boston, Massachusetts, and a syndicated columnist. His firm or clients may own or trade securities discussed in this column. He can be reached at jdorfman@ This article first appeared on GuruFocus. Sign in to access your portfolio
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2 days ago
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Luceco's (LON:LUCE) investors will be pleased with their decent 42% return over the last three years
Explore Luceco's Fair Values from the Community and select yours Luceco plc (LON:LUCE) shareholders have seen the share price descend 13% over the month. But at least the stock is up over the last three years. However, it's unlikely many shareholders are elated with the share price gain of 27% over that time, given the rising market. Let's take a look at the underlying fundamentals over the longer term, and see if they've been consistent with shareholders returns. Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement. During the three years of share price growth, Luceco actually saw its earnings per share (EPS) drop 18% per year. So we doubt that the market is looking to EPS for its main judge of the company's value. Therefore, we think it's worth considering other metrics as well. Do you think that shareholders are buying for the 0.6% per annum revenue growth trend? We don't. While we don't have an obvious theory to explain the share price rise, a closer look at the data might be enlightening. You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image). We like that insiders have been buying shares in the last twelve months. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. So it makes a lot of sense to check out what analysts think Luceco will earn in the future (free profit forecasts). What About Dividends? It is important to consider the total shareholder return, as well as the share price return, for any given stock. Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. In the case of Luceco, it has a TSR of 42% for the last 3 years. That exceeds its share price return that we previously mentioned. The dividends paid by the company have thusly boosted the total shareholder return. A Different Perspective While the broader market gained around 22% in the last year, Luceco shareholders lost 11% (even including dividends). Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 0.7% per year over five years. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. For instance, we've identified 2 warning signs for Luceco that you should be aware of. Luceco is not the only stock insiders are buying. So take a peek at this free list of small cap companies at attractive valuations which insiders have been buying. Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on British exchanges. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
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4 days ago
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Investors in SSE (LON:SSE) have seen respectable returns of 73% over the past five years
When you buy and hold a stock for the long term, you definitely want it to provide a positive return. But more than that, you probably want to see it rise more than the market average. But SSE plc (LON:SSE) has fallen short of that second goal, with a share price rise of 38% over five years, which is below the market return. Unfortunately the share price is down 2.3% in the last year. Let's take a look at the underlying fundamentals over the longer term, and see if they've been consistent with shareholders returns. This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality. To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price. Over half a decade, SSE managed to grow its earnings per share at 22% a year. The EPS growth is more impressive than the yearly share price gain of 7% over the same period. So it seems the market isn't so enthusiastic about the stock these days. You can see how EPS has changed over time in the image below (click on the chart to see the exact values). We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here.. What About Dividends? As well as measuring the share price return, investors should also consider the total shareholder return (TSR). The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. In the case of SSE, it has a TSR of 73% for the last 5 years. That exceeds its share price return that we previously mentioned. This is largely a result of its dividend payments! A Different Perspective SSE provided a TSR of 1.3% over the last twelve months. But that was short of the market average. On the bright side, the longer term returns (running at about 12% a year, over half a decade) look better. It may well be that this is a business worth popping on the watching, given the continuing positive reception, over time, from the market. It's always interesting to track share price performance over the longer term. But to understand SSE better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with SSE , and understanding them should be part of your investment process. If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: many of them are unnoticed AND have attractive valuation). Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on British exchanges. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
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5 days ago
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The three-year shareholder returns and company earnings persist lower as Bath & Body Works (NYSE:BBWI) stock falls a further 6.5% in past week
Many investors define successful investing as beating the market average over the long term. But if you try your hand at stock picking, you risk returning less than the market. Unfortunately, that's been the case for longer term Bath & Body Works, Inc. (NYSE:BBWI) shareholders, since the share price is down 20% in the last three years, falling well short of the market return of around 57%. Even worse, it's down 13% in about a month, which isn't fun at all. After losing 6.5% this past week, it's worth investigating the company's fundamentals to see what we can infer from past performance. AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early. To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price. During the three years that the share price fell, Bath & Body Works' earnings per share (EPS) dropped by 4.3% each year. This reduction in EPS is slower than the 7% annual reduction in the share price. So it seems the market was too confident about the business, in the past. The less favorable sentiment is reflected in its current P/E ratio of 7.50. You can see below how EPS has changed over time (discover the exact values by clicking on the image). We like that insiders have been buying shares in the last twelve months. Even so, future earnings will be far more important to whether current shareholders make money. It might be well worthwhile taking a look at our free report on Bath & Body Works' earnings, revenue and cash flow. What About Dividends? As well as measuring the share price return, investors should also consider the total shareholder return (TSR). Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. In the case of Bath & Body Works, it has a TSR of -14% for the last 3 years. That exceeds its share price return that we previously mentioned. And there's no prize for guessing that the dividend payments largely explain the divergence! A Different Perspective While the broader market gained around 23% in the last year, Bath & Body Works shareholders lost 6.3% (even including dividends). Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Longer term investors wouldn't be so upset, since they would have made 8%, each year, over five years. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. It's always interesting to track share price performance over the longer term. But to understand Bath & Body Works better, we need to consider many other factors. Take risks, for example - Bath & Body Works has 3 warning signs (and 1 which can't be ignored) we think you should know about. If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: most of them are flying under the radar). Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
