Hi there vdg:

There's lots of variations of "Graham's Criteria" about
on the web. I have seen this one and several different variations on it. As for an opinion on it, I really
don't have one except that I don't use it. Many people
have tried to approximate to Graham's criteria using
existing widely-available screeners. You'll notice that
Van Tharp did so in the "Safe Strategies" book in the
chapter on the "Graham Number" strategy. After reading
it I created this website in order to avoid having to
do that as Tharp's methodology was too time-consuming.

It's important to realize that mechanical stock screens
cannot be all things to all people. They can only be the starting point. If what you are looking for is a mechanical stock screen that will only come up with stocks that Ben
Graham himself would definitely pick, then you'll be
looking for an awful long time.

The correct use of a stock screen is to narrow things
down a little, but not too much initially, in order to
give you a manageable number of stocks on which to perform further research. A screen which only returns 2 stocks
is either far too good or way too bad.

Whichever way you look at it, screening aside, if you are
going to be putting your hard-earned money into stocks for
a long time, you're going to have to do further research.
As we all know, Graham did a lot of that, and I would
suspect that a lot of his picks were based on overall
judgement about the company and its future prospects, plus
where it currently stood in value relative to those future prospects more than any one or two fundamental criteria.

Our basic Graham Number screen for example looks for stocks that are trading at < 120% of NCAV, have positive cash flow
and low debt. From my reading of The Intelligent Investor
the 2/3 of NCAV requirement for "Bargain Stocks" was only
one criteria that Graham used in that particular methodology. (NOTE: For "enterprising" investors he relaxed the rule up
to 120% of NCAV which is why the screen goes up to 120%).

Graham also looked at P/E, long-term earnings, dividends,
etc, over a fairly long period. In my opinion, once the
basic criteria is screened for, you then need to use your
judgement about the company, its prospects, and its
trading pattern. Also bear in mind that P/E ratios today
are likely to be higher than in Graham's day, and
relatively few companies pay dividends today.

I like to use these screens to find stocks that are
undervalued in some way, or ignored due to prevailing
market sentiment, with declining or stagnating price
which otherwise have good longer-term prospects. Then
watch and wait for them to turn around, as they inevitably
do when news turns positive, sentiment changes and volume
comes in. It's a fairly simple strategy, but it seems to
work.

I hope this helps. Best of luck with your investing!