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Benjamin Graham NCAV Stock Screener
Use this stock screener to find deep value net net stocks with a significant margin of safety, as described by Benjamin Graham in his book "The intelligent investor"
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The use of combined ” value screeners” gives you an 360° perspective on the concept of “Value” and protects you from the possible loss of principal, which is, in our viewpoint the most important aspect of risk.
In order to calculate the value of a company Graham used not the book value (total assets - total liabilities) but instead used a more stringent measure called Net Current Assets Value (NCAV). He calculated this as: Current Assets (cash, inventories and accounts receivable) - Total Liabilities. He was only prepared to pay 2/3rds of this NCAV in order to build in a sufficient margin of safety.
It’s a stringent requirement, since most companies have negative NCAVs. Graham was looking for firms trading so cheap that there was little danger of falling further. His strategy calls for selling when a firm’s share price trades up to its NCAV. But of course , one is free to chose the "Margin of Safety" one prefers.
One research study, covering the years 1970 through 1983 showed that portfolios picked at the beginning of each year, and held for one year, returned 29,4%, on average, over the 13 year period, compared to 11,5% for the S&P 500 Index. Despite the impressive results, the strategy is relatively unknown to individual investors. The reason for that is that it requires some digging.
- In our screener we divide NCAV by market value. In our screener you one should select companies with an NCAV > 1.5.