10 Stocks Legendary Value Investor Benjamin Graham Would Buy Now

NEW YORK (TheStreet) -- Out of the multitude of companies, which ones would legendary value investor Benjamin Graham buy today?

We've compiled ten great companies that fit the ModernGraham criteria, based on Benjamin Graham's methods. The companies in this list pass our rigorous requirements and are undervalued by the market. (To find more companies that meet these tests, be sure to check out the ModernGraham Valuation Index, a list of all companies we cover.)

Here's a slideshow of outstanding companies that Benjamin Graham would buy today!

1.  Apple (AAPL)

Apple is an excellent company for enterprising investors -- research-oriented investors willing to take a bit of risk. The stock only fails one screen: the current ratio requirement. The company does not qualify for the more conservative defensive investor, due to its low current ratio, lack of a sufficiently long dividend record and high price-to-book ratio.

Enterprising investors should feel very comfortable proceeding with further research into the company and its competitors, including Microsoft (MSFT) and Google (GOOG) (GOOGL).

As for valuation, Apple appears to be significantly undervalued. It has grown its EPSmg (our own take on normalized earnings) from $9.22 to an estimated $37.86 for 2014, a growth rate that far outpaces the market's implied estimate of only 4.14% earnings growth. We return an estimate of intrinsic value that is much higher than the market price.

The stock is simply a good deal.

2.  CA Technologies (CA)

CA qualifies for conservative-minded defensive investors, and thus also qualifies for less risk-averse enterprising investors. The defensive investor's only concern is the low current ratio. The enterprising investor will have some slight concerns with CA's level of debt relative to the current assets, but the company is still a buy.

In short, value investors following Benjamin Graham's methods should feel comfortable proceeding with further research into CA Technologies and its competitors.

From a valuation perspective, CA appears to be undervalued after growing its EPSmg (our take on normalized earnings) from $1.06 in 2010 to $1.91 for 2014.

This demonstrated level of growth is greater than the market's implied estimate of 3.33% earnings growth and leads our valuation model to return an estimate of intrinsic value that is above the market price.

3.  D.R. Horton (DHI)

D.R. Horton is an interesting company for the enterprising investor, but is not suitable for the more conservative defensive investor. The company has shown insufficient earnings stability and growth over the 10-year historical period for the defensive investor. But Horton does pass all of the enterprising investor's requirements -- so they should feel very comfortable proceeding with further research into the company.

From the valuation side of things, D.R. Horton appears to be significantly undervalued after growing its EPSmg (our measure of normalized earnings) from -$1.91 in 2010 to an estimated $1.47 for 2014.

This level of demonstrated growth outpaces the market's implied estimate of 3.87% earnings growth and leads our valuation model to return an estimate of intrinsic value that is well above the market price.

4.  Franklin Resources (BEN)

Franklin Resources qualifies for both conservative defensive investors and less risk-averse enterprising investors. The defensive investor is only concerned with the high price-to-book ratio, while the company passes all of the requirements of the enterprising investor.

Value investors following Benjamin Graham's methods should feel comfortable proceeding with further research into the company and its competitors.

From the valuation side of things, Franklin Resources appears undervalued after growing its EPSmg (our measure of normalized earnings) from $1.91 in 2010 to an estimated $3.26 in 2014.

This level of demonstrated growth outpaces the market's implied estimate of 4.24% earnings growth and leads our valuation model to return an estimate of intrinsic value that is well above the price.

5.  Intel (INTC)

Intel is an outstanding company for both defensive investors and enterprising investors to consider. Intel passes all of the requirements of both investor types.

All value investors following Benjamin Graham's methods should feel comfortable proceeding with further research into the company and its competitors.

From the valuation side of things, Intel appears undervalued after growing its EPSmg (our take on normalized earnings) from $1.27 in 2010 to an estimated $1.96 for 2014.

This level of demonstrated growth outpaces the market's implied estimate of only 2.63% earnings growth and leads our valuation model to return an estimate of intrinsic value that is well above the market price.

6.  JPMorgan Chase (JPM)

JPMorgan Chase is suitable for either conservative defensive investors or less risk-averse enterprising investors. The company passes all of the requirements of both investor types, which is a rare accomplishment.

Value investors following Benjamin Graham's methods should feel comfortable proceeding with further research into the company.

From the valuation side of things, the company appears to be undervalued after growing its EPSmg (our measure of normalized earnings) from $2.92 in 2010 to an estimated $4.75 for 2014.

This strong level of demonstrated growth outpaces the market's implied estimate of only 1.62% earnings growth and leads our valuation model to return an estimate of intrinsic value that is well above the market price at this time.

7.  KLA-Tencor (KLAC)

KLA-Tencor is a very intriguing company for the enterprising investor, but is not suitable for the more conservative defensive investor. The company has shown insufficient earnings stability and trades at a price-to-book ratio too high for the defensive investor. However, the company passes all of the enterprising investor's requirements.

Enterprising investors should feel very comfortable proceeding with further research into the company.

From the valuation side of things, the company appears to be significantly undervalued after growing its EPSmg (our measure of normalized earnings) from 45 cents in 2010 to an estimated $3.65 for 2014.

This level of demonstrated growth outpaces the market's implied estimate of 4.74% earnings growth and leads our valuation model to return an estimate of intrinsic value that is well above the market price.

8.  Mattel (MAT)

Mattel is suitable for either the more conservative defensive investor or the research-oriented enterprising investor. For the defensive investor, the only concern is the high price-to-book ratio, while the company passes all of the requirements of the enterprising investor.

Value investors seeking to follow Benjamin Graham's methods should feel comfortable proceeding with further research into the company, including comparing the company to Hasbro (HAS) and Walt Disney (DIS).

From the valuation side of things, Mattel appears significantly undervalued after growing its EPSmg (our take on normalized earnings) from $1.35 in 2009 to $2.25 for 2013.

This demonstrated level of growth is greater than the market's implied estimate of 4.37% and leads our model to return an estimate of intrinsic value that is well above the market price.

9.  TE Connectivity (TEL)

TE Connectivity is suitable for research-oriented enterprising investors but not for conservative defensive investors. The company's operating history as a stand-alone entity is not long enough to satisfy the requirements of defensive investors, but the company passes all of the requirements of the enterprising investor.

So enterprising investors following Benjamin Graham's methods should feel very comfortable proceeding with further research into the company.

From the valuation side of things, the company appears to be undervalued after growing its EPSmg (our take on normalized earnings) from -41 cents in 2010 to an estimated +$3.13 for 2014.

This strong level of growth outpaces the market's implied estimate of 5.23% earnings growth and leads our valuation model to return an estimate of intrinsic value that is well above the market price.

10.  Viacom (VIAB)

Viacom is an intriguing company for the enterprising investor, having passed all but one of the investor type's requirements. The company does not qualify for the defensive investor, though, due to the low current ratio, lack of long enough dividend history and high price-to-book ratio.

As a result, enterprising investors should feel comfortable conducting further research into the company and its competitors, such as Time Warner (TWX).

From a valuation perspective, the company appears to be undervalued after growing its EPSmg (our measure of normalized earnings) from $2.29 in 2010 to an estimated $4.62 for 2014.

This solid level of demonstrated growth outpaces the market's implied estimate of 5.02% earnings growth and leads our valuation model to return an estimate of intrinsic value that is well above the market price.

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At the time of publication, the author held AAPL and DIS but held no positions in any of the other stocks mentioned.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

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