One of the most enduring methods for identifying these opportunities is grounded in the principles of Benjamin Graham, known as the father of value investing and a mentor to Warren Buffett. Graham’s timeless strategies, detailed in his classic book The Intelligent Investor, remain a cornerstone for investors seeking long-term success. However, the landscape of today’s fast-moving markets, influenced by technological advancements, e-commerce growth, and algorithmic trading, brings greater challenges and volatility.
To navigate this modern complexity, investors can now turn to advanced tools that apply Graham’s principles with precision. One such tool is the “Ben Graham Formula,” available within InvestingPro+’s screener. This innovative feature enables investors to identify undervalued stocks by focusing on key metrics such as market capitalization while ignoring less essential factors like analysts’ targets and Return on Invested Capital (ROIC).
Use Warren Buffett’s Guru’s Formula to Find Undervalued Stocks
A standout example using this screener is South Indian Bank (NS: SIBK). Based on Graham’s value principles, the stock appears undervalued. According to financial models available on Investing Pro+, the estimated fair value of the bank is INR 28.9 per share, indicating a 17.6% upside from its current price of INR 24.6. Moreover, analysts have set an average target price of INR 35.1, suggesting an even higher target and consequently a positive sentiment. When both the intrinsic value and analysts’ forecasts exceed the CMP, it signals a strong investment opportunity.