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This screen is influenced by a strategy discussed by Benjamin Graham in the book, The Intelligent Investor.
At the 2021 SALT New York conference, which was held earlier this week, one of the panels on the main stage discussed the best macro shifts coming out of the pandemic and investing in value amid distress. The panel featured: Todd Lemkin, the chief investment officer of Canyon Partners; Peter Wallach, the managing director and Read More
Defensive Investor Description
In the book, Graham identifies two categories of investors; the defensive and the enterprising.
According to Graham, a defensive investor buys from a “diversified list of leading common stocks” and ensures that the price paid “is not unduly high as judged by applicable standards.”
We display such a list based on the requirements spelled out by Graham.
Click here to learn more about the Defensive Investor stock screen.
Top Defensive Investor Stock
Helmerich & Payne (HP) is currently the only Defensive Investor stock trading below its intrinsic value.
Here’s how HP stacks up against the strategy’s criteria:
Helmerich & Payne (HP)
Helmerich & Payne, Inc. engages in the contract drilling of oil and gas wells. It provides drilling rigs, equipment, personnel, and camps on a contract basis to explore for and develop oil and gas from onshore areas and from fixed platforms, tension-leg platforms, and spars in offshore areas.
The company operates through three segments: U.S. Land, Offshore, and International Land. The company also owns, develops, and operates commercial real estate properties; and researches and develops rotary steerable technology.
Helmerich & Payne, Inc. was founded in 1920 and is headquartered in Tulsa, Oklahoma.
- Market Cap: $6.76 Billion
- Current Ratio (MRQ): 4.71
- Working Capital – Long-Term Debt = $718 Million
- Positive Earnings Streak: 10+ Years
- Dividends Paid Streak: 10+ Years
- Net Income % Growth, 5 Year CAGR: 22%
- Current Price: $61.36 (closing price on 8/30/16)
- Intrinsic Value: $75.43
- Price/Intrinsic Value: 81%
Due to the nature of deep value strategies such as the Defensive Investor, average investors will find numerous reasons not to buy the above stock.
Disciplined investors, on the other hand, will find success following such a simple investment strategy.
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Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Mitchell Mauer is the Founder of TheStockMarketBlueprint.com. The Stock Market Blueprint is a site that finds value stocks for investors building long-term wealth. The site’s investment philosophy is anchored in principles established by Benjamin Graham and his most reputable followers over the last 100 years.