From our adjustment, GADANG is valued at RM 3.364 based on the Benjamin Graham formula. It has a 22% margin of safety from today's (17/8/2016) closing price of RM 2.62.
Summary
Benjamin Graham’s intrinsic value formula isn’t perfect. There are several flaws in the model but for the average person who wants to try and put together a diversified portfolio of high quality blue chip stocks that will grow over time without major wipeout risk, it does have utility.
What are the shortfalls? It doesn’t account for capital intensity, for one. That is important.
But it’s still useful in serving as a safety check to help you avoid using stocks as a lottery ticket and overpaying for businesses.
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