Username Password
About People & Picks | Help | Sign up
Home My P&P People Picks Tops Blogs Groups
S&P 500: 1,317.11 Change: -0.21%
Vet67to82
Vet67to82
P&P Score: 0.31   Points: -608.47   Accuracy: 68.73%   Average Pick Score: -4.50   Annual Return: 16.23% (40.60% since 11/25/09)  

Vet67to82's Blog : Micron Tech (MU) FairValue

Date March 7, 2011    Comments Comments (8)    Rate this post Recommend This Post (137)   
Bookmark and Share
Abuse this post  Report Abuse
Please report this as abuse only if you believe it violates People And Picks  Terms of Use
You must log in to send an abuse report.
Share ThisShare This
Free Options Trader Guide

In the many differing ways to calculate whether to buy (undervalued) or sell (overvalued) a stock, one needs a basis to determine FAIR VALUE (FV) of the stock or security. 


The Graham number estimates the maximum price an investor should pay for a stock after a formula developed by Mr. Benjamin Graham. The formula calculates Fair Value using current Earnings per Share (EPS) (trailing twelve months or ttm) and book value (BV) per share.


 Assumptions in the Graham number calculation:


(a) the P/E should be no greater than 15


(b) the price per book value should be no greater than 1.5


(c) the product of a and b should be no greater than 22.5


So, the Formula looks lke this:


FairValue (FV) = SQRT( 22.5 x BV x EPS )


SQRT = square root


-------------


Micron Tech (MU)  $11.08   has EPS of $1.78 ttm and BV of $8.25. .... which calculates to a FairValue of $18.18. therefore Micron Tech (MU) is undervalued to FV by $7.25 or 66.31 percent. 


Micron Tech (MU) also has a Tangible Book Value per Share (TBVPS) of $7.94.


 


To insure one is not cherry picking the data to support the outcome one wants ( or making math errors ) it's alway important to have alternative means of calculating the FairValue (FV) for comparison and confirmation.


... more to follow ..

Tags : FV   EPS   BV   MU   TBVPS  

8 Comment(s):

Author JoeJustJoe     Date March 25, 2011 13:10 Abuse this post Report Abuse
Please report this as abuse only if you believe it violates People And Picks  Terms of Use
You must log in to send an abuse report.
Actually, Vet...fair value fo Moooooooo "might be" bankruptcy. I'm gonna let da pig trade thru that thur 11.95 high befo I spalunk it GOOG tho. I wouldn "suggest" you do as Owl chose ta do with his Earl pigs anna stand in my way. Jist givin ya "fair" warnin like I always do befo I kick sum honkie azz. *-) 3J
Author Vet67to82     Date April 4, 2011 15:20 Abuse this post Report Abuse
Please report this as abuse only if you believe it violates People And Picks  Terms of Use
You must log in to send an abuse report.
Joe.

I have the Annual and Quarterly reports for over a thousand companies. The reports for Micron Tech show NOTHING that "might be" bankruptcy. I don't think it unfair that we ask you to please back up blanket statements wih "facts."
Author Vet67to82     Date April 4, 2011 15:21 Abuse this post Report Abuse
Please report this as abuse only if you believe it violates People And Picks  Terms of Use
You must log in to send an abuse report.
Joe.

I have the Annual and Quarterly reports for over a thousand companies. The reports for Micron Tech show NOTHING that "might be" bankruptcy. I don't think it unfair that we ask you to please back up blanket statements wih "facts."
Author JoeJustJoe     Date April 4, 2011 16:29 Abuse this post Report Abuse
Please report this as abuse only if you believe it violates People And Picks  Terms of Use
You must log in to send an abuse report.
I will certainly back up ALL my projections with the fax....you'll jist hasta wait until my projeckshuns materialize is all :-) Remember, nooooobudy sees AAPL as a $20 dollah stock in the future basides me...and thur certainly isn't NE1 else on this planet who has da guts to go up agin Warren 'the" Baffoon anna deeeeeestroy his empire basides yers trooly. That thur sed.....Moooooooo still didn't hit the 11.95+ price target I listed fer ye. As "always"....I try n give the "nonbelievers" at least one mo time to "sssthink thangs over" befo I crash n bernum. Jist axe da Wiz anna his AUNFF play...I already hit the "promised" targut ov 1.10 once. Moooo is still safe from clamity for the time being...unless some unforseen neggy news release comes out. I kin purrdckt those two...but I try ta stay outta da bidness ov selling newspapers :-) 3J
Author JaiH     Date April 5, 2011 08:29 Abuse this post Report Abuse
Please report this as abuse only if you believe it violates People And Picks  Terms of Use
You must log in to send an abuse report.
MU is one of the 10 best performing stocks on NASDAQ for 2011
link
http://www.thestreet.com/story/11067173/1/10-best-performing-nasdaq-stocks-of-2011.html?puc=tsczacks&cm_ven=tsczacks
Author JoeJustJoe     Date April 5, 2011 09:09 Abuse this post Report Abuse
Please report this as abuse only if you believe it violates People And Picks  Terms of Use
You must log in to send an abuse report.
The buyout news on NSM
should" help the seckter....altho I "doubt" Rimmie gits out ov his NVDA calls with anythang but BIG losses :-) It's GOOG to see TXN taking advantage of its shareholders to take out a competitor. This is eggZack'sly what we would "expect" to see at a majer top in the markets. Mooooooo will "probly" trade thru 11.95 by Th I'm wreckin. I'm keepin my Fri slate clear. :-) 3J
Author Vet67to82     Date April 5, 2011 11:11 Abuse this post Report Abuse
Please report this as abuse only if you believe it violates People And Picks  Terms of Use
You must log in to send an abuse report.
Thanks for your input Joe and JaiH ... based on my own spreadsheets ... and formulas ... like my analysis and purchases on STX, MU is going higher.

I clearly like reading opposing opinions, as well as supportive articles, for a test of my own homework ... after all it is OUR money ... and who'll take better care of our money than us?

When we do our own HOMEWORK ... it's not I hope, or I think, or I want ... .... it's I KNOW! Homework renders Knowledge and Confidence ... and that's priceless!
Author JoeJustJoe     Date April 5, 2011 12:37 Abuse this post Report Abuse
Please report this as abuse only if you believe it violates People And Picks  Terms of Use
You must log in to send an abuse report.
No problemo, Vet, the semis are one seckter thaaas still "looks like" it gots a run left in em. I'm sooprised the NSM news isn't moving the others with Mighty Mo conviction. Mooooo is "probly" jist completing the gapola fill is all. I prefer RFMD in the seckter actually. It "should" trade thru 8.48 befo crash n bern. GOOG luck to ya! *-) 3J
Want to comment on this post? Sign up now. It's FREE!
Already registered? Log In.
Sponsored Links
©2008-2012 PeopleAndPicks.com | Terms of Use