Ben Graham’s Net Current Asset Values: A Performance Update

Oppenheimer, Henry R.

doi:10.2469/faj.v42.n6.40

Cited by 18 publications

(14 citation statements)

References 2 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…The main objective of this paper is to empirically test one of his investment methods based on the net current asset value (NCAV) which is truly unique and conservative and commonly known as the net-net method. This study will be different from the previous studies (e.g., Oppenheimer, 1986;Bildersee et al, 1993;Ying and Arnold, 2007) in that we offer a conceptual investment framework within which ordinary investors can design and construct a comfortable investment strategy for a long-term investment horizon under different market conditions. In addition, this study is using current data for stock prices and accounting information.…”

Section: Introductionmentioning

confidence: 87%

“…1 NCAV is generally more stable and predictable than the earnings stream, and valuing companies based on their liquidation value would be appealing to conservative investors. The first study involving NCAV was done by Oppenheimer (1986) over the period 1970 to 1983. Each year, a portfolio was formed consisting of companies that had a share price no more than two-thirds of their NCAV.…”

Section: Empirical Studies On Classical Value Investingmentioning

confidence: 99%

“…Therefore, it might have been made more sense of looking for such stocks in foreign equity markets during bullish market conditions such as 1980s. When Oppenheimer (1986) examined NCAV model for the study of period from 1970 to 1982, it might have been somewhat easier to find NCAV stocks because of the stock market crash of 1973 and 1974.…”

Section: Empirical Studies On Classical Value Investingmentioning

confidence: 99%

See 2 more Smart Citations

Testing Benjamin Graham’s net current asset value model

Cheh

Kim

2015

JEFS

View full text Add to dashboard Cite

show abstract

Section: Introductionmentioning

confidence: 87%

Section: Empirical Studies On Classical Value Investingmentioning

confidence: 99%

Section: Empirical Studies On Classical Value Investingmentioning

confidence: 99%

See 1 more Smart Citation

Testing Benjamin Graham’s net current asset value model

Cheh

Kim

2015

JEFS

View full text Add to dashboard Cite

show abstract

“…Testing by Oppenheimer (1986) in the New York Stock Exchange, Bildersee et al (1993) in the Tokyo Stock Exchange, and Xiao and Arnold (2008) in the FTSE found that the strategy beats the market. However, Dudzinski and Kunkel (2014) found that only small number of stocks could pass the criteria.…”

mentioning

confidence: 99%

Tests of quantitative investing strategies of famous investors: case of Thailand

Sareewiwatthana

Janin²

2017

Investment Management and Financial Innovations

View full text Add to dashboard Cite

This research studied quantitative investing strategies of famous investors in the Stock Exchange of Thailand from 2002 to 2016. This study found that the Graham’s net nets, Dreman’s contrarian, Fisher’s super stock, O’Neil’s CANSLIM, Slater’s zulu principle, Neff’s Cheapo, O’Shaughnessy’s tiny titans, Greenblatt’s magic formula, Carlisle’s acquirer’s multiple and Piotroski’s F-score strategies beat the market (SET TRI). It also found that the Benjamin Graham’s net nets strategy which used the market capitalization of less than two thirds of net current assets value (NCAV) criterion produced the highest return among the strategies used. However, the Tobias Carlisle’s Acquirer’s multiple strategy which used EBIT to enterprise value (EBIT/EV) to sort stocks for 30 stocks yielded the highest risk-adjusted return.

show abstract

“…Graham used the NCAV/MV criterion extensively in the operations of the Graham-Newman Corporation and report that shares selected on the basis of the NCAV/MV rule earn, on average, about 20percent per year over the 30-year period to 1956 (Graham and Chatman (1996)). More recently, Oppenheimer (1986) tested returns of NCAV/MV portfolios with returns on both the NYSE-AMEX value-weighted index and the small-firm index from 1971 through 1983. He found that returns are rank-ordered: securities with the smallest purchase price as a percentage of NCAV show the largest returns.…”

mentioning

confidence: 99%