Small research of stock's with Graham's Intrinsic Value of Growth > 0 ...
How realistic is this Value of growth?

I believe you need to look only at companies with growth > 15%.
The IV screen only considers these, and actually selects only
stocks both with past 5 yrs growth >15% as well as next 5 yrs
expected growth > 15%.

I don't think most growth stocks are undervalued, but if you are comparing growth stocks with growth stocks, you can safely say that
some growth stocks are undervalued *relative to other growth stocks*.

A problem for us is: how accurate are forward growth
estimates provided by analysts? I really don't know the answer
to that question, but most analyst estimates of EPS are
directed by guidance from the companies themselves, at least
in the shorter-term. It's probably a LOT more difficult to
estimate growth for longer periods into the future.

I don't think the figures we have are too unrealistic. We could use
the low end of consensus earnings estimates for our calculations
in order to make the IV value more conservative and probably
still come up with the same stocks.

[quote:keownb format="text/plain"]

 I don't think the figures we have are too unrealistic. We could use
the low end of consensus earnings estimates for our calculations
in order to make the IV value more conservative and probably
still come up with the same stocks.

[/quote]

The differens between lowest and consensus estimates is very small, here is the scan:

The problem is, i have the data on lowest estimates not for all stocks =(

 

Where do you get the fundamental data for the DB from?

 

Do you have a possibility to research how often the IV was reached by the growth stocks in the past? OR maybe you have already researched that?

 

Yeah, the difference is small, that's why I didn't bother using it. As I mentioned, it's unlikely to make much difference to the stocks turned up by the screens. Growth seems to be the biggest multiplier in Graham's formula I'm more concerned
about Growth measures than actual estimates of EPS values.

The data is obtained from various free sources on the web,
e.g. Y!

I have not done any back testing. Back testing may be useful
to some, but personally I don't care for it because what happened in the past doesn't necessarily happen in the
future. In any case, IV does not remain constant. If a
stock continues to do well, then its IV will increase
with increased growth/earnings forecasts.

If you wish, you can write down some of the IVs of stocks
in the screen today and check back in a year or two to
see where their prices are at. But what do we know? The
market could go down in the next couple of years. I'd
rather get on-board any undervalued stocks that are going
up in the meantime and let stops take me out if that
happens.