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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 (2024-10-31), the stock price of Erie Indemnity Co is $448.85. Erie Indemnity Co's graham number for the quarter that ended in Jun. 2024 was $89.33. Therefore, Erie Indemnity Co's Price to Graham Number ratio for today is 5.02.
The historical rank and industry rank for Erie Indemnity Co's Graham Number or its related term are showing as below:
During the past 13 years, the highest Price to Graham Number ratio of Erie Indemnity Co was 5.06. The lowest was 2.26. And the median was 3.19.
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 Erie Indemnity Co'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.
Erie Indemnity Co Annual Data | |||||||||||||||||||||
Trend | Dec14 | Dec15 | Dec16 | Dec17 | Dec18 | Dec19 | Dec20 | Dec21 | Dec22 | Dec23 | |||||||||||
Graham Number | Get a 7-Day Free Trial | 54.36 | 53.55 | 57.33 | 59.66 | 78.12 |
Erie Indemnity Co Quarterly Data | ||||||||||||||||||||
Sep19 | Dec19 | Mar20 | Jun20 | Sep20 | Dec20 | Mar21 | Jun21 | Sep21 | Dec21 | Mar22 | Jun22 | Sep22 | Dec22 | Mar23 | Jun23 | Sep23 | Dec23 | Mar24 | Jun24 | |
Graham Number | Get a 7-Day Free Trial | 67.04 | 72.89 | 78.12 | 82.93 | 89.33 |
For the Insurance Brokers subindustry, Erie Indemnity Co'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 Insurance industry and Financial Services sector, Erie Indemnity Co's Price-to-Graham-Number distribution charts can be found below:
* The bar in red indicates where Erie Indemnity Co's Price-to-Graham-Number falls into.
Graham Number is a concept based on Ben Graham's conservative valuation of companies.
Erie Indemnity Co'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 | * | 31.8 | * | 8.53) |
= | 78.12 |
Erie Indemnity Co's Graham Number for the quarter that ended in Jun. 2024 is calculated as
Graham Number | |||||
= | sqrt of (22.5 | * | Tangible Book per Share | * | EPS without NRI (TTM)) |
= | sqrt of (22.5 | * | 34.974 | * | 10.14) |
= | 89.33 |
* 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.
Erie Indemnity Co (NAS:ERIE) 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.
Erie Indemnity Co's Price to Graham number Ratio for today is calculated as
Price to Graham number | = | Share Price (Today) | / | Graham number (Q: Jun. 2024 ) |
= | 448.85 | / | 89.33 | |
= | 5.02 |
* 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 Erie Indemnity Co's Graham Number provided by GuruFocus.com. Please click on the following links to see related term pages.
Charles Scott Hartz | director | TWO BALA PLAZA, SUITE 300, BALA CYNWYD PA 19004-1573 |
Borneman J Ralph Jr | director | NATIONAL PENN BANCSHARES INC, PHILADELPHIA & READING AVENUES, BOYERTOWN PA 19512 |
Marc Cipriani | officer: Senior Vice President | 100 ERIE INSURANCE PLACE, ERIE PA 16530 |
Sean Dugan | officer: Executive Vice President | 100 ERIE INSURANCE PLACE, ERIE PA 16530 |
Parthasarathy Srinivasa | officer: EVP, Chief Information Officer | 100 ERIE INSURANCE PLACE, ERIE PA 16530 |
Jorie L Novacek | officer: SVP, Controller | 100 ERIE INSURANCE PLACE, ERIE PA 16530 |
Thomas B Hagen | director | 230 WEST 6TH STREET, ERIE PA 16507-1319 |
Eugene C Connell | director | 785 HUNTINGTON DRIVE, ERIE PA 16505 |
Elizabeth A Vorsheck | director, 10 percent owner | 6252 COMMERCIAL WAY PMB 140, BROOKSVILLE FL 34613 |
Brian W. Bolash | officer: SVP,Secretary,General Counsel | 100 ERIE INSURANCE PLACE, ERIE PA 16530 |
Hudson Brian Arden Sr. | director | 2407 PARK DRIVE, HARRISBURG PA 17110 |
Louis F Colaizzo | officer: Senior Vice President | 100 ERIE INSURANCE PLACE, ERIE PA 16530 |
Salvatore Correnti | director | 8518 SOUTHFIELDS CIRCLE, LUTHERVILLE MD 21093 |
Timothy G Necastro | officer: President & CEO, Designate | 100 ERIE INSURANCE PL, ERIE PA 16530 |
Luann Datesh | director | 333 OAK FOREST DRIVE, PITTSBURGH PA 15216 |
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