Classic Value Investors
Benjamin Graham and Warren Buffett is a Classic Value Investors screen. It checks every NSE-listed stock against 4 conditions computed from nightly data, after excluding heavily pledged promoters and very small market caps. This page explains the rule, each figure and its source. It lists no stocks and is not advice.
Benjamin Graham — the father of value investing and Buffett's teacher — believed that stocks should be bought with a margin of safety: pay considerably less than what the business is worth so that even if your analysis is wrong, you do not lose money. His criteria combine cheap valuation (low PE, low PB), financial safety (more liquid assets than long-term debt, current ratio above 2), and operational scale (minimum revenue). Buffett refined this by also requiring a proven earnings track record. Together, these criteria filter for businesses that are both cheap and safe — avoiding the value trap of cheap-but-deteriorating companies.
A stock must satisfy every condition below. Conditions are grouped under the pillar they test.
Valuation
Described in the philosophy; not a pass/fail condition in the current rule
Financial Safety
Earnings Track Record
General conditions
Hard excludes
Ranked by Current Ratio, highest first.
Price-to-Earnings Ratio
Current price divided by trailing 12-month earnings per share. Graham required PE below 15 for a value stock.
Low is better
Price-to-Book Ratio
Current price divided by book value per share (total equity / shares outstanding). Graham required PB below 1.5. A PB of 1.0 means the stock trades at exactly what the company's assets are worth on paper after all liabilities.
The asset valuation check. A low PB means you are not paying a large premium over what the company actually owns. Note: PB is less meaningful for asset-light businesses (software, FMCG brands) where most value is intangible. It is most relevant for manufacturing, banking, and commodity companies.
Low is better
Current Ratio
Current assets divided by current liabilities. Graham required current ratio above 2.0 — meaning the company has at least twice as many short-term assets as short-term obligations.
The liquidity safety check. A current ratio above 2.0 means the company can comfortably meet all its short-term obligations even if some assets become uncollectable. Below 1.0 means the company is technically illiquid in the short term.
High is better
Long-Term Debt / Net Working Capital
Long-term debt divided by net working capital (current assets minus current liabilities). Graham required this to be below 1.0 — meaning long-term debt should not exceed net working capital.
The leverage safety check. A ratio below 1.0 means the company's liquid assets exceed its long-term debt, so in theory it could retire all long-term debt using its working capital. This is a conservative constraint that most companies fail, which is why this screener produces a small list.
Low is better
Annual Revenue (₹ Cr)
Total revenue in the most recent fiscal year, in crores of rupees. Graham required a minimum annual sales threshold equivalent to roughly ₹250 Cr in today's terms.
The operational scale check. Tiny companies can appear statistically cheap because their financials are volatile and unreliable. A minimum revenue filter removes micro-caps where a single contract or its loss can swing all metrics wildly.
High is better
Type hypothetical values to see which conditions they satisfy. These are not real stocks and nothing here is stored.
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How many stocks pass if this threshold were set differently. Counts only; no stocks are named.
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We have not measured this screen yet, so there is no record to explain.
Not yet testable — 5 of 6 points needed to chart a rolling information coefficient.
This is a historical, statistical measurement produced by FINOME TECHNOLOGIES PVT LTD's research harness on past data. It is not a prediction, and past results do not indicate future results. The universe is today's Nifty 500 constituents, so the sample is affected by survivorship bias. It describes how a screen's selections behaved in the past and does not constitute investment advice or a recommendation.
Rule version 1.0.0