Investment tools for private investors

Valuation using Ben Graham Formula

The famous Ben Graham stock valuation formula for valuating growth stock with steady long-term earnings growth rate.

Value = (earnings x (8.5 + 2g) x 4.4) / Y

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Valuing "WPP WPP PLC"

Valuation Assumptions

Latest quoted share price £  
Number of ordinary shares  
 
 
Latest reporting financial year    
Total cash & cash equivalents £
Total interest-bearing debts £
Earnings £
Long-term earnings growth rate (g)   %  
Investment grade corporate bond yield (Y)   %  
P/E for zero growth stock   x  
Earnings growth multiplier   x  

Valuation Results

  • Price & Intrinsic Value Chart
  • £42.28
    Intrinsic value
    +223.5%
    Value Vs Price variation

Calculations

Value of company operations £57,824,954,880
+ Add cash & cash equivalents £2,437,000,000
- Less total interest-bearing debts £6,099,000,000
Business intrinsic value £54,162,954,880
Business intrinsic value per share £42.28

+Tips & Advice

  • The drawback of the Ben Graham formula is that the growth rate is a big element of the overall valuation. Use PE ratio for no growth stock between 7 and 8.5 and growth multiplier between 1.5 and 2 to be more conservative.