Benjamin Graham equation
Can someone check my math? According to Benjamin Graham, —Buy only stocks priced below 22.5 times the average 12-month earnings— He also said to use a multi year average to find true P/E…And buy only stocks under 22.5x the P/E…
The picture is the EPS for the last 5 years of PARA. So my math says Para is a buy since it is under $48.33.
Add up the five numbers, divide by 5 to get the average then multiply by 22.5.
Does anyone do this? Did I do this right?
Thanks!
For reference: PARA’s EPS last 5 years
(1.02)…1.61…6.87….3.92…5.36
