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Benjamin Graham's Stock-Picking Strategies

Kimberly Lankford

Plenty of Web sites have stock screens based on methods established by the father of securities analysis.



Is there a Web site for stock screening that uses Benjamin Graham's value-investing rules?

Benjamin Graham, the father of securities analysis, outlined his stock-picking strategies in The Intelligent Investor, published in 1949, and those strategies have been widely disseminated -- including on the Internet -- ever since.

Graham advocated buying a stock at a price well below the company's intrinsic value. His goal was to get a dollar of assets for less than 50 cents. That discount gives investors a margin of safety, which insulates them from the whims of the market.

Plenty of Web sites have screens based on Graham's methods. For example, he prized companies with net cash holdings (cash minus outstanding debt) equal to at least 50% of their stock-market value.Nasdaq's Web site offers a free Graham screener that selects Nasdaq-traded stocks that pass the test.

Morningstar.com offers a customized screen that applies a broader array of Graham's criteria. The screen is part of Morningstar's premium membership, which costs $15.95 per month, or $145 for one year. Or, for less than $20, buy The Intelligent Investor and create your own Graham-inspired screens at Kiplinger.com or Yahoo Finance.

A word of caution: Graham's criteria can lead you to stocks that are value traps, meaning the shares are cheap for good reason and unlikely to appreciate. Screens are a good place to start, but don't buy without doing your research.

Got a question? Ask Kim at askkim@kiplinger.com.




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