Graham's Number
The Graham number, or Benjamin Graham number, is a figure used in securities investing that measures a stock's so-called fair value. It is named after Benjamin Graham, the founder of value investing. According to Graham, the Graham Number is the maximum that an investor should pay for a stock, and is used to find undervalued companies. Graham Number is calculated as the square root of 22.5 multiplied by EPS and BPS. The 22.5 multiple is used to represent a maximum PE ratio of 15 and a maximum book value per share of 1.5 (15 x 1.5 = 22.5)
Formula
Graham's Number = Sq. Root ( 22.5 x EPS x Book Value per Share )