Hello,
I did my own analysis of the EPS numbers for N Brown PLC and I'm getting different numbers to the ones shown by the screener. Is the diluted earnings per share the figure that should be inputted? The different numbers would suggest that it doesn't meet Graham's criteria, contrary to what the Serenity algorithm suggests, so this is rather important. I've found this is the case for a few other stocks I've analysed as well. How important are the yearly EPS numbers to Graham's calculation? Also, for the book value per share and tangible book value, is that the current value as it is currently trading or the one based on the annual financial statement. Presumably the latter? I'm finding it's difficult to find this number in the reports and I don't trust myself to work it out on my own!
Thanks,
Alasdair
Submitted by alasdair.ji.campbell. Created on Wednesday 8th July 2020. Updated on Wednesday 8th July 2020.
Fiscal Year 2019
Dear Alasdair Campbell,
Thank you for your forum post!
The data for N Brown Group PLC (BWNG.L) appears to be outdated, and is marked as having a Fiscal Year value of 2019-03-02. The Fiscal Year value can be viewed on both the screeners, and the individual stock pages (in the Stock Data tab).
Serenity does use the diluted EPS for its analyses. Graham analyses are done almost exclusively with annual data.
EPS BWNG
The EPS is now as in Alasdair's analysis. I don't recall what it was before.
For the past 12 years the EPS have had (mostly) uninterrupted positive earnings (above zero). The EPS has also been declining for the past 9. Is this decline taken into account at all?
The stock has gone from a Defensive around 500 iv% to an NCAV of around 30 iv%. I understand that this is to do with earnings because 2 years ago it dropped to -0.2 EPS, so can no longer be considered Defensive again till 8 years have passed. It just seems quite a big change in position on a stock - from being massively in favour of buying to "Do not buy".
Thank you,
Long-Term By Design
Dear Jez,
Thank you for your forum post!
The data for N Brown Group PLC (BWNG.L) does seem to have been updated, and is now marked as having a Fiscal Year value of 2020-02-29. That would explain the change in rating. Short-term changes in a stock's grading need not be taken too seriously; as Value Investing is a long-term by design.
Hi Jez,
Hi Jez,
I looked into this too a while back, and, if I remember correctly, Serenity was previously using the normalised EPS figures and now it's the diluted EPS. Even despite the negative EPS, Graham made exceptions for stocks that fulfilled all other criteria, and BWNG still seems like a great value buy given its size and financial position.
On another note, it would of course be helpful if the screener worked correctly (with the correct closing price). It has been faulty for the past few months for most UK stocks, and I'm a paying subscriber...
Alasdair
U.K. stocks
Dear Alasdair,
Thank you for your comment!
U.K. stocks have been a little tricky on Serenity since many are traded in GBX (or GBp) while their financials are reported in GBP. However the requisite code for 100x conversion has been in place for a while now.
Could you please elaborate on which stocks are being incorrectly updated? It appears most U.K. stocks including N Brown Group PLC (BWNG.L) are being updated regularly.
Hello,
Hello,
Closing prices are not showing correctly (including for your BWNG link - it shows as 0.00), meaning that intrinsic value data is not showing correctly (an important stat, as it helps us decide whether a stock meets the margin of safety requirements for investment). I just tried it for Sony, and the same applies (‘0.00’). I guess this data could be found elsewhere, but it’s very useful to have on the screener. As it currently stands, it’s not possible to organise results by intrinsic value. Also I don’t know whether the incorrect listing of closing prices affects anything else in your calculations; hopefully not!
Alasdair
Graham Parameters Unaffected
Dear Alasdair,
Thank you for your comment!
N Brown Group PLC (BWNG.L) is indeed showing a price of Zero. Apologies for that! Serenity gets all its data from its data provider — Finnhub — and this discrepancy will be escalated to them.
However, the price will not affect the other Graham parameters and the Intrinsic Value calculations do remain valid. Such stocks will simply not be shown as valid Graham stocks on the screeners.
There are also a number of U.K. stocks with positive prices that do clear Graham's framework on Serenity's screeners.
Hello. Thanks. Hopefully the
Hello. Thanks. Hopefully the closing price issue can be sorted out so the intrinsic value % feature on these stocks can be used as it was intended.
Could you explain why stocks that were, a few months ago, listed as either defensive or enterprising using your advanced screener (such as N. Brown, Ted Baker, and Tapestry) no longer fulfil these criteria? Is it because of the recent negative EPS? Previously, I believe, N Brown had an intrinsic value of around £3.50, but now it’s 20p. What has caused such a change?
Quite Likely
Dear Alasdair,
Thank you for your comment!
Any drop in a stock's EPS is quite likely to have an effect on it's overall valuation.
N Brown Group PLC (BWNG.L) also seem to have a negative EPS value from two years ago. That would prevent it from clearing both the Defensive or Enterprising requirements for those Graham Grades.