4 Graham-Buffett style stocks

by J. Royden Ward, editor Cabot Benjamin Graham Value Letter

Benjamin Graham has been recognized for decades as the father of value investing. Warren Buffett was a student of Graham at Columbia University and later worked for Mr. Graham for several years.

For our latest special report, I combine Warren Buffett’s and Ben Graham’s criteria for choosing stocks; here, we look at four high-quality companies that fit our criteria.

To find these Graham-Buffett style investment opportunities, I looked for stocks with:

1. Free cash flow more than $20 million.
2. Net profit margin more than 15%.
3. Return on equity more than 15%.
4. Discounted cash flow value higher than current price.
5. Market capitalization more than $1 billion.
6. Standard & Poor’s rating of B+ or better.
7. Positive earnings growth during the past five years with no deficits.
8. Dividends currently paid.

These stocks sell at sensible prices, offer reasonable appreciation potential and provide solid dividends. I am confident these high-quality stocks will fare very well during the next six months.(more)