Only Eight U.S. Companies Pass Jefferies' Graham & Dodd Screener

With global equity markets pushing to new highs around the world, analysts at Jefferies set out last month to gauge how cheap or expensive the equity markets really are, by conducting a dispassionate search for value in the US. Jefferies’ analysts used the approach that Benjamin Graham and David Dodd created and revealed in their classic textbook, ‘Security Analysis’.

Analysts ran two screens, firstly, a ‘defensive’ portfolio based on US large caps with a long-term record of profitability and strong financial conditions. Secondly, a more ‘aggressive’ screen, with a number of the criteria ‘relaxed’ -- along the lines of Graham & Dodd’s screen for enterprising investors.

Only eight US companies passed both screens, a disappointing result compared to the...