Valuation of all stocks listed in Holland AEX All Share AAX: Benjamin Graham Defensive Investor method

Warren Buffett: "Well, start with the A’s." Click on the companies below for Graham Evaluation:

Aalberts Industries 2020
ABN AMRO 2020 
Accell Group 2020 
Ahold Delhaize Koninklijke 2020
Accsys Technologies 2020

Adyen 2019
Aedifica 2019
Aegon 2019
AFC AJAX 2019
Air France-KLM 2019 
Akzo Nobel 2019 
Alfen 2019
Altice 2019
Alumexx 2019 (voorheen Phelix, Inverko, Newconomy)
AMG Advanced Metallurgical Group NV 2019
Amsterdam Commodities ACOMO 2019
AND International Publishers 2019
Apollo Alternative Assets 2019 
Aperam 2019
Arcadis 2019
ArcelorMittal 2019 
ASM International 2019
ASML 2019
ASR Nederland 2019
Avantium 2019
BAM Koninklijke Groep 2019
Basic Fit 2019
BE Semiconductor AEX:BESI 2019
Beter Bed Holding 2019
B&S Group 2019

Berkshire Hathway 2019 run by Warren Buffett

Bever Holding 2019
Boskalis Westminster Koninklijke 2019
Boussard & Gavaudan Holding Ltd. An expensive hedge fund.
Brill, Koninklijke 2019
Brunel 2019
Coca-Cola European Partners 2019
Corbion 2019
Core Laboratories 2019
Ctac 2019
Curetis 2019
DGB Group 2019 check May 2020 
DPA Groep N.V. 2019
DSM Koninklijke 2019
Dutch Star One 2019
Ease2pay 2019
Envipco 2019
Eurocastle 2019
Eurocommercial Properties 2019
Euronext 2019
Fagron 2019
Fastned 2019
Flow Traders 2019 
FNG 2019
ForFarmers 2019
Fugro 2019
Galapagos 2019
GrandVision 2019 EUR 28 offer
HAL Trust 2019 buy at EUR 143
Heijmans 2019
Heineken 2019
Holland Colours 2019 buy under €100
Hunter Douglas 2020
Hydratec 2019
ICT Group NV 2019
IEX Group 2019 still losing money, not for the defensive investor
IMCD 2019
ING Bank 2019
Intertrust 2019
Kendrion 2019
Kiadis Pharma 2019
Klepierre cheap at €20? 2019
KPN 2019
K. Porceleyne Fles Koninklijke 2019
K. VOPAK 2019
K. Wessanen 2019 buy out?
K. VolkerWessels 2019
Lavide Holding 2019 
Lucas Bols 2019
Marel 2019
Nedap 2019
MKB Nedsense 2019
Morefield Group 2019 (voorheen Headfirst)
New Sources Energy 2020
Neways 2019
NIBC 2019

NN Group  2019
Novisource 2019
NSI Nieuwe Steen Investments HNK = Het Nieuwe Kantoor 2019
OCI 2019
Oranjewoud 2018   https://www.oranjewoudnv.nl/uitstel-publicatie-jaarverslag-2019-oranjewoud-n-v-2/  Check Juli 2020
Ordina 2019
Pershing Square 2019
Pharming 2019
Philips 2019
PostNL 2019
Randstad 2019
Retail Estates 2019
RELX 2019
RoodMicrotec 2019
Royal Dutch Shell 2020
SBM Offshore 2019
Sif Holding 2019
Signify Philips Lighting 2019
Sligro 2019
SnowWorld 2019
Stern Groep 2019 still a buy?
Takeaway.com 2019
Tetragon 2019
Thunderbird Resorts 2019
TIE Kinetix 2019
TKH Group 2019
TomTom 2019
Unibail Rodamco 2019 a buy?
Unilever 2019
Value8 2019
Van Lanschot 2019
Vastned Retail 2019
Vivoryon (voorheen Probiodrug) 2019 
Volta Finance 2020
WDP 2019
Wereldhave, buy! 2020
Wolters Kluwer 2019

R.I.P.
Batenburg Techniek: Taken off the stock exchange for 46 Euros by van Puijenbroek family. Good price for investors:  http://sinaas.blogspot.com/2018/08/batenburg-techniek-graham-valuation.html
BinckBank 2019 Saxobank
Esperite: 2018 Stem Cell Bank losing money, selling shares. Price recently fell from 3 to 0,25
oktober 2019 falliet, koers: 0,046 geen handel.
Gemalto Thales offer 2018
Groothandelsgebouwen N.V. bought for EUR 56,92

Kardan 2019 June 2020: https://www.iex.nl/Nieuws/ANP-240620-111/Kardan-geeft-beursnotering-in-Amsterdam-op.aspx
KAS BANK 2019
Yatra Capital 2020

Other countries:
Starbucks

Culture eats strategy for breakfast. Rough notes on Sir John Glubb and Frank Slootman and the "Search for Survival"

The culture eats strategy for breakfast quote means that no matter how strong your strategic plan is, its efficacy will be held back by members of your team if they don't share the proper culture. When it comes down to it, the (tribe of) people implementing the plan are the ones that make all the difference.

Note: In 2021 great companies are human software AI cyborgs. As in the Industrial Revolution mechanical machines made fortunes, now in during the Information Revolution "thinking" but not reasoning? machines rake in cash. 

 Mijn colleague Björn Kijl recommended: Sir John Glubb: Fate of Empires and Search for Survival a 26 page read http://people.uncw.edu/kozloffm/glubb.pdf?

To put it too? bluntly, the thought that came to mind this morning after I read it yesterday is basically: P*ssies get f*cked (or as Schumpeter put it "creatively destroyed" https://en.wikipedia.org/wiki/Creative_destruction )

but also the conclusion: "the noblest and most spiritual of the devotees of all religions seem to reach the conclusion that love is the key to human life. Any expansion of our knowledge which may lead to a reduction in our unjustified hates is therefore surely well worth while."

This brings to mind Frank Slootman now CEO at Snowflake (the most successful Dutch-born businessperson alive?) who left the The Netherlands and became an American, because of culture: The American Dream. 

He says: "We are not the Peace Corp, we are the Marine Corps" ->   https://www.linkedin.com/pulse/amp-up-frank-slootman/

#FreeDam elke zondag 13 uur tot 15 uur Dam, Amsterdam tot einde Coronawet en noodverordeningen

Geen speeches, maar luisteren naar elkaar. 

Doe je normaal, dan doe je al gek genoeg.

Denk in oplossingen/thema's

Zondag       Thema

14-2     Gouverneur Kristi Noem, South Dakota

21-2    Gouverneur Ron DeSantis, Florida

28-2    Nobelprijs winnaar Michael Levitt, Covid19 is niet exponentieel

7-3      Anders Tegnell van Zweden

14-3    Nicaraugua

21-3   Belarus Wit-Rusland vrijheid?

28-3   Tanzania / Zanzibar

4-4     Bolivia

11-4  North Dakota 

18-4 Pollen, influenza en COVID19, Martijn Hoogeveen

25-4 Dubai UAE

2-5  Omaha, Nebraska 100% open

5-5 Bevrijdingsdag: Fakkel van Vrijheid op de Dam? 

De Zevende Golf? knipsel van een boek die ik las in de politiecel.

...in Nederland wordt eindeloos gebakkeleid over het alledaagse, roept men twijfels en bange vermoedens op over de meest geheide zekerheden. De redelijkste oplossing wordt meedogenloos en fataal ondergeschikt gemaakt aan de fanatieke oppositie van hen die alleen tegen zijn om later, in geval van mislukking, niet het verwijt te dat ze geen bedenkingen hadden, geen blijk hadden van kritisch inzicht. Nederland is bij uitstek het land van ketterijen, fracties en partijen. Zo op het eerste gezicht de bakkermat van de Gezonde Twijfel... tot het moment waarop de expert zijn intrede doet. Zodra die erbij wordt gehaald, de officieel als expert bekend staande of, in lastige gevallen, een commissie van experts, houdt de Nederlander gehoorzaam zijn mond, om in het stof te buigen voor de Wijsheid, blij zich bevrijd te voelen van schuld, verantwoordelijkheid en twijfel.'

Hunter Douglas bod EUR 64 bericht Rowan Nijboer

In 2020 viel de aandeel Hunter Douglas even tot EUR 39 nu is er een overname bod voor EUR 64 .  Bericht Rowan Nijboer :

Zaterdagavond kreeg ik fantastisch nieuws. Er is namelijk een bod gedaan op 1 van de aandelen in mijn portefeuille. Er werd maar liefst 25,5% boven op de beurskoers van vrijdag geboden voor mijn aandelen. Dus afgelopen maandag opende de beurskoers circa 25% hoger. Dat is snel verdiend.    In dit specifieke geval kan jij er niet meer van profiteren omdat de beurskoers dus al fors hoger staat. Wie weet kan je er wel van leren door in de toekomst te anticiperen op zulke financieel prachtige gebeurtenissen.   Hunter Douglas Het bedrijf in kwestie heet Hunter Douglas. Hunter Douglas is de maker van luxaflex en wereldmarktleider in het luxesegment raambekleding. Het aandeel staat aan de Nederlandse beurs. Doordat de familie Sonnenberg zo’n 90% van de aandelen heeft is slechts 10% van de aandelen vrij verhandelbaar. Doordat zo weinig aandelen verhandelbaar zijn zit het bedrijf niet in de AEX maar staat het genoteerd aan de lokale markt.   Small caps of aandelen genoteerd aan de lokale markt worden vaak genegeerd door grote beleggers. Die kunnen namelijk geen posities innemen simpelweg omdat er te weinig aandelen worden aangeboden. En hier heeft de particuliere belegger een groot voordeel op de professional. Jij kan dat namelijk wel.   Hoe werkt het bod? De familie Sonnenberg doet nu een bod op de overige 10% van de aandelen. Het bod is in contanten en € 64 per aandeel. Ik verwacht dat de overname in Q2 2021 wordt afgerond. Dat wil zeggen dat je als aandeelhouder in Q2 de € 64 cash op je brokerrekening krijgt gestort.   Tenminste, als de overname doorgaat. Hier ben ik voor 99,9% zeker van omdat er aan een aantal indicatoren is voldaan. Bijvoorbeeld dat de familie Sonnenberg al de baas is met 90% van de aandelen. Die kunnen het bod gewoon doordrukken.   Ben ik echt blij? Nee. Ik vind de werkelijke waarde van de aandelen ruim boven de € 64 per aandeel liggen. Ondanks de 25% rendement die ik maandag in de schoot geworpen kreeg en wat tijdelijk een lekker gevoel gaf ben ik niet blij. Als het bedrijf zelfstandig was blijven doorvaren was de kans groot dat het rendement de komende jaren voor mij hoger was geweest. Maar het is niet anders. Op zoek naar een ander idee.   Wat kan je hiervan leren? Het is altijd lekker als er een bod komt op 1 van je posities want uit wetenschappelijk onderzoek blijkt het bod gemiddeld 30% bovenop de beurskoers te zijn. Heb je een bedrijf in portefeuille waar een bod op komt is het dus kassa.   Bepaalde aandelen hebben een veel grotere kans op een overnamebod. Een bedrijf als Apple zal bijvoorbeeld nooit worden overgenomen omdat ze veel te groot zijn. Wie kan Apple als geheel kopen? Dus die extra premie kan je bij grote bedrijven vergeten. Bovendien zijn grote bedrijven gemiddeld hoger gewaardeerd.

Accsys Technologies

Update 28/12/2020

New CEO Rob Harris has raised prices to be able to break even. Share price low EUR 0,70 now EUR 1,64. Selling shares. Now outstanding: 164m x 1,64 is market cap of EUR 269m on sales of EUR 94 is Price to Sales of almost 3, but new factory in Hull will soon be online. 

Book value per share EUR 0,57

Conclusion: Too difficult pile.  

Update October 2019:
Sales have increased to €75m, but still making a loss. The Van Piuijenbroek family bought 6,2m shares @92 cents providing funding.

Book value €73,6m/116m shares = 64 cents per share.

Share price = €1,13

Book value per share and share price have both increased since last June 2018. Too difficult pile..
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Accsys Technologies PLC (LSE:AXS and AS:AXS) is an intellectual property and chemical technology group focused on the transformation of wood through acetylation. This is done by reacting the wood with acetic anhydride, which comes from acetic acid (known as vinegar when in its dilute form).

Bron: FD

When the free hydroxyl group is transformed to an acetyl group, the ability of the wood to absorb water is greatly reduced, rendering the wood more dimensionally stable and, because it is no longer digestible, extremely durable.

Year ending March 31st 2018, sales have gone up 6%, but gross profit euros has decreased. The company is losing 8 cents per share, but will open new production in 2018 and 2019.

You could argue that financing new projects like this (and in the past shipping companies like the VOC, railroads, etc) is what public equity is meant for.

The company has sold 20 million shares in the past year to bring in more funding.

Book value is roughly Equity 43m Euros / 111m shares = 40 cents per share book value.

A price of 20 cents per share might be interesting? The price is... 92 cents per share.

Conclusion: Not an investment for the Graham Defensive Investor. 

Templeton Re-Balancing Program: Decrease stocks from 50% (80% April) to 45% now. Plus program for December 2021

Background:

Sir John Templeton used to give his clients a yearly program at the beginning of the year. If at the end of the year the Dow Jones had increased significantly, they should lower the percentage of their wealth held in stocks. On the other hand, if prices have become more attractive it makes sense to increase the percentage held in stocks AFTER stock prices have decreased. 

As Warren Buffett puts it: “I will tell you how to become rich. Close the doors. Be fearful when others are greedy. Be greedy when others are fearful.”

Since December 13th last year (below) the MSCI World index https://www.msci.com/world (USD) has increased from $2309 to $2645. 

At the end of March 2020 during the Covidpanic the index dipped to $1600 which entailed 80% in stocks. At the time my colleagues and I invested and Hendrik Oude Nijhuis told others to invest as well: https://www.fondsnieuws.nl/nieuws/stockpicker-deze-staat-van-paniek-een-koopmoment I myself invested less at that moment than I had planned (in the hope prices would drop further). 

According to the adapted John Templeton re-balancing program, I made last year, your percentage of wealth allocated to stocks today should decrease from 50% to 40%. Because it is just at the edge (and I don't want people to sell too many ValueMachinesFund units) I would say reduce exposure to shares to 45% now. 

Here is the plan for re-balancing at the end of next year (December 2021) a 7% increase in levels: 

Sir John Templeton explained the reasoning and expected beneficial results of making and adhering to a logical plan in a Memorandum to Clients in 1945:

"It is a continual source of surprise to Mr. Vance, Mr. Dobbrow and me, when speaking for the first time with investors with whom we have not spoken before, that so very many people seem never to have thought out comprehensively the nature and problems of investment management. So many go along, year after year, in a haphazard manner, buying a stock now and them whenever some situation, which particularly strikes their fancy, is called to their attention.

In a steady or rising market, the haphazard investor usually obtains profitable results and is lulled into a false sense of security. Then along comes a decline like those which culminated in 1921, 1932, 1938, and 1942 and the good record is wiped out, because he had no plan for capturing and locking up the profits in the happy days.
...
Many people act as if the selection of stocks and bonds is about all there is to the problem of conducting an investment program. Of course, the element of 'selection' is important. A carefully thought out method for weeding out overvalued stocks and replacing them with undervalued stocks does produce profits. But the backbone of an investment program is the question of "when to buy" and "when to sell." The first step in planning is to divide the stocks and equities on the on hand (ValueMachinesFund) from the cash and bonds on the other (alternatieve beleggingen). The second step is to think out and adhere to a program for shifting out of stocks when they are high and back into stocks when they are again quoted at bargain prices.

The stock market has always been, and always will be, subject to side degrees of fluctuations. When prices decline farther and farther, it is only natural human emotion to become cautious. Investors who have no prearranged plan to guide them not only fail to add to their stock holdings at the lower levels (sometimes because they have nothing left to buy with), but too frequently they add to the downward pressure by selling out part or all the stocks they own. Conversely, at other times, stock prices are pushed up far above real values by the understandable human tendency to buy when businessmen and friends are preponderantly prosperous and optimistic.

If an investor can sell out when the very top is reached and then buy back at the nadir of the subsequent stock market decline, he will indeed, grow rich quickly. But this can de done only by extraordinary luck. We have never found anyone who could forecast the rises and declines of the stock market correctly and consistently. ...

If no one can forecast the stock market trend, how then, it may be asked, can an investment plan include the important element of shifting the balance between stocks and bonds (alternatieven) in the fund? In answer to that question, this company developed in 1938, and put into practice, certain principles which make use of the major market fluctuations without attempting to forecast. Subsequently, such principles have become known as the "Yale Plan" or the "Vasser Plan."

In the simplest terms, the 'balance' of the investment fund is shifted gradually step-by-step away from stocks and into bonds when the stock market rises and then subsequently back from bonds into stocks when the market declines. The result is moderate growth in the invested funds over each completed market cycle, without the need for any predictions of trends or turning points. An investment plan incorporating these principles assures you that you will be ready and able to buy stocks (ValueMachinesFund) in periods of gloom when others are selling and that you will be selling when prices are reaching new high levels and optimism abounds.

Any sound long-range investment program requires patience and perseverance. Perhaps that is why so few investors follow any plan. Years may go by before the risks of haphazard stock purchasing are revealed by losses. And years may go by before experience proves the increased safety and enduring growth achieved by planning. Over a period of 20 years, however, it is not too much to expect that investment planning may cause the invested funds to double. "

Democracy is dying in darkness. Let there be light on the streets and squares. #DAMstratie

Dwight D. Eisenhower

Farewell Address 

delivered 17 January 1961

Was President Eisenhower was right in his farewell address when he warned that?

"Today, the solitary inventor, tinkering in his shop, has been overshadowed by task forces of scientists in laboratories and testing fields. In the same fashion, the free university, historically the fountainhead of free ideas and scientific discovery, has experienced a revolution in the conduct of research. Partly because of the huge costs involved, a government contract becomes virtually a substitute for intellectual curiosity. For every old blackboard there are now hundreds of new electronic computers. The prospect of domination of the nation's scholars by Federal employment, project allocations, and the power of money is ever present -- and is gravely to be regarded.

Yet, in holding scientific research and discovery in respect, as we should, we must also be alert to the equal and opposite danger that public policy could itself become the captive of a scientific-technological elite.

It is the task of statesmanship to mold, to balance, and to integrate these and other forces, new and old, within the principles of our democratic system -- ever aiming toward the supreme goals of our free society."

https://www.americanrhetoric.com/speeches/dwightdeisenhowerfarewell.html

Today the highly respected British Medical Journal describes how the things Eisenhower warned us about in 1961, have come to pass in 2020:  "Politicisation of science was enthusiastically deployed by some of history’s worst autocrats and dictators, and it is now regrettably commonplace in democracies. The medical-political complex tends towards suppression of science to aggrandise and enrich those in power. And, as the powerful become more successful, richer, and further intoxicated with power, the inconvenient truths of science are suppressed. When good science is suppressed, people die." https://www.bmj.com/content/371/bmj.m4425

I am on Dam Square, Amsterdam every Sunday from 1pm until 3pm (after mass on the street because the church is "full") until emergency laws are lifted as they have been in Florida, Sweden, etc. #DAMstratie

Ahold Delhaize Graham Defensive Value

After the Ahold Delhaize merger Amazon bought Whole Foods supermarkets in the US and investors dumped Ahold Delhaize shares. Hendrik Oude Nijhuis (www.beterinbeleggen.nl and co-founder of ValueMachines Fund) wrote in VEB Magazine in March 2018 that investors (Mr. Market) were (was) overreacting. Since then the company's Value has increased and the Price of the stock has increased even more quickly closing the gap between the two. (But I missed the boat = opportunity cost).

SCTOR: [PASS] AHOLD is neither a technology nor financial Company, and therefore this methodology is applicable. 

SALES: [PASS] The investor must select companies of "adequate size". This includes companies with annual sales greater than €260 million. AHOLD's sales of €66 260 million, based on 2019 sales, pass this test.

CURRENT RATIO: [FAIL] The current ratio must be greater than or equal to 2. Companies that meet this criterion are typically financially secure and defensive. AHOLD's current ratio €9 570m/€12 590m of 0,8 fails the test.

LONG-TERM DEBT IN RELATION TO NET CURRENT ASSETS: [FAIL] For industrial companies, long-term debt must not exceed net current assets (current assets minus current liabilities). Companies that do not meet this criterion lack the financial stability that this methodology likes to see. The long-term debt for AHOLD is  €14 180, while the net current assets are minus €3 020 million. AHOLD fails this test.

LONG-TERM EPS GROWTH: [PASS] Companies must increase their EPS by at least 30% over a ten-year period and EPS must not have been negative for any year within the last 5 years. Companies with this type of growth tend to be financially secure and have proven themselves over time. AHOLD's EPS growth of 160% over that period passes the EPS growth test.

Earnings Yield:  [PASS] The Earnings/Price (inverse P/E) %, based on the lesser of the current Earnings Yield or the Yield using average earnings over the last 3 fiscal years, must be "acceptable", which this methodology states is greater than 6,5%. Stocks with higher earnings yields are more defensive by nature. AHOLD's E/P of 7.5% passes this test.

Graham Number value: [FAIL] The Price/Book ratio must also be reasonable. That is the Graham number value must be greater than the market price. AHOLD has a Graham number of √(15 x €1,7 EPS x 1,5 x €12.6 Book Value) = €22,-

Dividend: 0,76 / 23,4 = 3% The company is also buying back EUR 1b of EUR 24,4b in market cap = 4% So you could argue current Return of Capital is 7% per year. 

Conclusion November 2020: Price seems reasonable. 

Accell share price and Benjamin Graham value

Sales are currently up due to Coronavirus crisis with people biking to avoid public transport and for local vacations? 

Graham Defensive analysis based on The Intelligent Investor book Chapter 14:

SECTOR: [PASS] Accell is neither a technology nor financial Company, and therefore this methodology is applicable. 

SALES: [PASS]  The investor must select companies of "adequate size". This includes companies with annual sales greater than €260 million. Acell's sales of €1 111 million, based on 2019 sales, pass this test.

CURRENT RATIO: [FAIL] The current ratio must be greater than or equal to 2. Companies that meet this criterion are typically financially secure and defensive. Accell's current ratio €574m/€406m of 1.4 just fails the test.

LONG-TERM DEBT IN RELATION TO NET CURRENT ASSETS: [PASS] For industrial companies, long-term debt must not exceed net current assets (current assets minus current liabilities). Companies that meet this criterion display one of the attributes of a financially secure organization. The long-term debt for Accell is €129 million, while the net current assets are > €126 million. Accell just "passes" this test.

LONG-TERM EPS GROWTH:[FAIL] Companies must increase their EPS by at least 30% over a ten-year period and EPS must not have been negative for any year within the last 5 years. Companies with this type of growth tend to be financially secure and have proven themselves over time. Accell's Earnings per Share have not grown over the past ten years due to the expensive takeover of Raleigh North America.

Earnings Yield: [FAIL]  The Earnings/Price (inverse P/E) %, based on the lesser of the current Earnings Yield or the Yield using average earnings over the last 3 fiscal years, must be "acceptable", which this methodology states is greater than 6,5%. Stocks with higher earnings yields are more defensive by nature. Accell's E/P of 3% (using an estimate of next year's Earnings) fails this test.

Graham Number value: [FAIL]  The Price/Book ratio must also be reasonable. That is the Graham number value must be greater than the market price. Accell has a Graham number of √(15 x €0,8 EPS x €12 Book Value) = €15. Today's price is: €25

Dividend: Accell pays a dividend of roughly €0,50, which is 2%

Notes last year Friday, August 30, 2019

Accell Group started a North American adventure in 2012. It just sold its loss-making operations there for $1,- As you can see in the graph the step into North America has hurt the geometric average of book value and earnings per share over the past years, that is the Benjamin Graham Defensive Value:

Conclusion 2019: Earnings should be better in the future, now that the North America adventure is mostly over. 

Conclusion 2020: Too expensive, sales might be lower next year? 

Rough notes on Baidu stock price and Graham Value $bidu

Baidu means "a hundred times".  A Googol is the digit 1 followed by one hundred zeroes: 10,​000,​000,​000,​000,​000,​000,​000,​000,​000,​000,​000,​000,​000,​000,​000,​000,​000,​000,​000,​000,​000,​000,​000,​000,​000,​000,​000,​000,​000,​000,​000,​000,​000. 

SECTOR: FAIL Baidu is in the Technology sector, which is one sector that this methodology avoids. Technology and financial stocks were considered too risky to invest in when this methodology was published even decades ago. Several of Graham's criteria, like the Current Ratio and Debt to Current Assets, do not apply to financial companies. As a result, the company will not be able to pass this methodology, although we will include the remainder of the analysis for informational purposes.

SALES: PASS The investor must select companies of "adequate size". This includes companies with annual sales greater than 260 million Euros. Baidu's Sales of  15 billion, based on 2019 figures, passes this test. Sales have not increased during the past few years.

CURRENT RATIO: PASS The current ratio must be greater than or equal to 2. Companies that meet this criterion are typically financially secure and defensive. Baidu has  USD 24 billion in Current Assets and Current Liabilities of USD 8,5 billion. The current ratio of 2,8 is very defensive.

LONG-TERM DEBT IN RELATION TO NET CURRENT ASSETS: PASS Long term debt must not exceed net current assets. Companies that meet this criterion display one of the attributes of a financially secure organization. Baidu has USD 16 billion of Net Current Assets and USD 10,2 billion in debt and thus passes this test. 

LONG-TERM EPS GROWTH: PASS FAIL Companies must increase their EPS by at least 30% over a ten-year period and EPS must not have been negative for any year within the last 5 years. EPS for Baidu have increased 300% in ten years, but dipped in 2019 and haven't really increased since 2017. 

Earnings Yield: PASS FAIL The Earnings/Price (E/P) ratio, based on the lesser of the current E/P or the E/P using average earnings over the last 3 fiscal years, must be "acceptable", which this methodology states is greater than 6,6%. Stocks with high Earnings Yields are more defensive by nature. Baidu's Earnings Yield of 6% (based on this year's estimated Earnings of USD 8 per share) is close to passing this test.

GRAHAM NUMBER: FAIL The geometric average of 1,5 x book value and 15 x EPS is the Square Root of 1,5 x 67 USD x 15 x 6 USD = 91 USD.

DIVIDEND: Baidu does not pay a dividend but is buying back roughly 1/15th of its shares. USD 3 billion in buybacks.

Conclusion and Disclaimer 2020: I own Baidu shares via www.valuemachinesfund.nl