Graham vs. Greenblatt (Session 4) Buy some cheap earnings

falling+money Graham vs. Greenblatt (Session 4) Buy some cheap earnings
In our last post we looked at Greenblatt’s use of Return on Capital as a means of identifying quality companies that know how to turn a small investment into a substantial return. In this posting we will look at his next criteria earnings yield.

What is it?

EBIT
enterprise value

What does it tell us?

EBIT is defined as Earning before Interest and Tax, as we discussed in the last posting that works out to the raw income flowing into the company.

Enterprise Value is defined as market capitalization – cash and cash equivalents + preferred stock + debt
bullet Graham vs. Greenblatt (Session 4) Buy some cheap earnings Read More...

Buy on the Cheap (Price/Earnings) (Session2)

accounting dollar sign Buy on the Cheap (Price/Earnings) (Session2)To follow up our Graham intro we will investigate Graham’s first insurance technique of buying on the cheap. Graham used a number of ratios to determine if a company is cheap. The first ratio we need to look at is the Price/Earnings ratio.
bullet Buy on the Cheap (Price/Earnings) (Session2) Read More...
 
   

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