NEW YORK ( TheStreet) -- It's vacation season. After all, Congress is on the cusp of a "much deserved" (note the sarcasm) summer recess, and won't return until early September. In all honesty, I wish they take more time off; one or two months in session per year would be more than enough.It's also probably a great time for deep-value investors to take some time off. The pickings have become so slim in value land, that it's time to take a rest. Put down that stack of 10K's you've been perusing, turn off the financial channel you've been watching, and head for the beach. Clear your mind for now, and re-start your search for value after some much needed rest.
Another Ben Graham-related search, based on his "Stock Selection Criteria for the Defensive Investor," is revealing very little these days. This screen is a bit more involved than the net/net search described above, and utilizes the following criteria:
Adequate size: Minimum sales of $500 million on a trailing 12-month basis. (Graham called for minimum sales of $100 million and total assets of at least $50 million.)
Strong financial condition: The company must have a current ratio -- current assets divided by current liabilities -- of at least 2, and long-term debt must be less than working capital.
Earnings stability: The company must have positive earnings for the past seven years (Graham used a minimum of 10 years).
Dividend record: The company must have paid a dividend for the past seven years (Graham used 20 years).
Earnings growth: Growth must be at least 3% compounded annually over the past seven years (Graham used a minimum increase in earnings per share of one-third over the past 10 years).
Moderate price-to-earnings ratio: The stock must have traded at an average P/E of 15 or less in the past three years.
Moderate ratio of price to assets: The price-to-earnings ratio times the price-to-book ratio must be less than 22.5.