Five large-cap U.S. stocks are priced materially below the intrinsic values produced by Ben Graham’s formula, implying theoretical upside between roughly +99% and +215.9% versus current market prices. Under Graham’s Margin of Safety concept, investors should seek sizable discounts to intrinsic value; the classic numeric gates used here are price-to-earnings at or below 15 and price-to-book at or below 1.5 - all five companies meet both limits today.
Graham Scorecard
| Company | Price | Graham Value | MoS Upside | P/E | P/B | Div Yield |
|---|---|---|---|---|---|---|
| Charter Communications (CHTR) | $144.43 | $458.05 | +215.9% | 3.5x | 1.1x | — |
| Lincoln National (LNC) | $46.09 | $131.50 | +188.3% | 3.9x | 0.9x | 3.9% |
| White Mountains Insurance (WTM) | $2,092.12 | $4,654.77 | +121.9% | 5.0x | 1.0x | 0.05% |
| RenaissanceRe (RNR) | $320.62 | $682.40 | +113.3% | 5.2x | 1.2x | 0.5% |
| CNX Resources (CNX) | $36.01 | $71.21 | +98.9% | 5.6x | 1.1x | — |
How the market is valuing these names
Charter Communications stands out on the list for the sheer scale of the gap: a market price of $144.43 versus a Graham-derived value of $458.05, implying a +215.9% upside using the formula’s inputs. The cable and broadband operator is trading at 3.5 times earnings; the low multiple reflects secular pressures in the cable industry - notably cord-cutting - even as cash flow remains substantial.
Two insurance-sector companies appear on the screen: Lincoln National and RenaissanceRe. Both trade at single-digit P/E multiples (3.9x for Lincoln National and 5.2x for RenaissanceRe) and below or near book value on P/B. Insurance businesses can experience wide swings in profitability from catastrophe losses or reserve adjustments, which contributes to persistent market discounts. Lincoln National is the only firm in this group that also offers a meaningful dividend yield, at 3.9%.
White Mountains Insurance, a specialty insurer and holding company, is priced at essentially book value with a P/B of 1.0. Under Graham’s framework, a company trading at book could be an attractive prospect; the market, however, appears to price in complexity linked to its conglomerate-like structure.
CNX Resources, a natural gas exploration and production company, meets the Graham thresholds as well, at 5.6x P/E and 1.1x P/B. The company’s valuation reflects the cyclical nature of commodity pricing - a structural factor that tends to compress multiples for energy producers.
The Graham caveat
Graham’s intrinsic value formula - V = EPS × (8.5 + 2g) × 4.4 / Y - favors companies with steady earnings and repeatable growth. The approach can overstate intrinsic value for businesses whose current reported earnings are not representative of normalized, long-term earnings power. In each of these five cases, the sizable margin of safety derived from the Graham calculation exists largely because the market questions the persistence or quality of earnings. That discrepancy between formulaic value and market price is the core tension any value-seeker would need to evaluate.
Methodology note: A market-cap filter greater than $5 billion was used as a proxy for index candidacy, since a direct index-membership filter was not available. The list therefore comprises large-cap, primary U.S. listings that could be considered candidates for major indices.
Summary takeaway
All five companies meet classic Graham criteria of P/E ≤ 15 and P/B ≤ 1.5 and show substantial theoretical upside versus their Graham-derived values. That signal must be balanced against sector-specific risks and questions about earnings durability that appear to underpin the market’s discounted pricing.