Our newest addition to our Fund Spotlight Series. Here we are building off of our Ben Graham Value Screen Series, and making those screens investable with just a click with the help of Motif Investing.
This is a collection of companies that most recently have passed Graham’s stringent value investing screen.
Of the whole investing universe, less than 25 companies make the list. What would Ben Graham buy today? this is probably a good start:
If you are unfamiliar with Motif Investing, they offer a way for investors to build their own “Motifs” (basically an ETF), which can contain up to 30 stocks. Investors can trade ALL 30 stocks for $9.95 commission.
Other brokers may charge $9.95 PER STOCK, which would cost you nearly $300 to do what you can do with Motif for $9.95. And remember, unlike ETFs or mutual funds, you pay no expense ratio for holding individual stock. That means a significant savings over time.
How much savings? Try our Expense Ratio Calculator and find out!
We have a partnership with Motif investing here at Begin To Invest. Readers who join from this site can qualify for up to $150 CASH deposited into their Motif account.
And as the last reminder/disclaimer – I personally invest in each and every Motif that we create here on Begin To Invest. I don’t just spam articles on here every week for the sake of writing. Motif has a minimum investment in a Motif of $250. That means for each article like this I write, I invest AT LEAST $250 in the idea. That is anything but a guarantee of results, but it does mean I have some “skin in the game”.
To summarize Warren Buffett in a letter to his partners – “I do not know what the future holds, but I know we share the same fate.”
Now with that out of the way, onto the real reason for today’s article:
The Ben Graham Value Fund
Here at Begin To Invest, we highlight the stocks that make it through Ben Graham’s “Defensive Investor” screen and “Enterprising Investor” screen every quarter. The Motif below is for the stocks that passed Ben Graham’s Enterprising Investor screen at the start of the 4th quarter of 2016. What does it take to pass Ben Graham’s screen? Here is his criteria:
- Current Ratio: Greater than 1.5
- Earnings: Must be positive over the last 5 years
- Dividend Record: Must pay a dividend currently
- Earnings Growth: Must be positive over last 7 years
- Price: Must be less than 1.2x TBV (Tangible Book Value)
In our last article, 23 companies passed Ben Graham’s screen. Motif investing does not allow companies with share prices under $5 to be included in Motifs, so a few stocks had to be cut from our list.
Here are the companies that pass Ben Graham’s Enterprising Investor screen for the fourth quarter, 2016:
(click to enlarge)
You will notice these are companies whose share price have been beaten down as of late. Ben Graham was a deep value investor. These companies have a history of being profitable and growing, but for whatever reason have come across hard times today. None of these are “glamorous” names like Apple, Facebook or Tesla.
And that is exactly why they offer such potential.
These companies are CHEAP. They are trading near book value or even below book value. They are unpopular. They have been left for dead. And IF they turn things around, investors stand to be rewarded.
These stocks individually may be risky. Historically they have a wide range of performance over the next year. Collectively, you are buying a group of stocks that have historically performed well. Over short periods of time, they may continue to underperform the market substantially.
Together this Motif has a dividend yield of 2.4% with an average P/E ratio just over 10. You can click on the image below to go to the motif’s page:
For those looking to invest in a diversified collection of value stocks, I think this provides a great way to start.
If you read our previous article on the Ben Graham screen results, you will notice that no companies pass his “Defensive Investor” screen. No doubt, a sign that the stock market has become a bit more expensive than normal.
In a day where value is hard to find, I’m happy to know we have a good chunk of it here.
For those interested in learning more about Motif Investing, Learn more about MotifInvesting.com
And if you are interested, be sure to take advantage of their $150 offer, which expires at year end:
Value investing not your thing? We have done some other fun things with Motif Investing too! Check out:
Interested in investing in Rental Real Estate? We created a motif that invests in companies that solely own and rent residential real estate. See our article here:
Looking to invest with some of the worlds most famous investors without paying their high fees? Clone their fund with help of Motif investing. You can see one example with our article here: