Value Investing for Doctors with High Debt
Dr. Sharma, while earning a substantial income (AGI $350,000) and diligently saving through her 401k and backdoor Roth IRA, felt overwhelmed by her $280,000 student loan debt. She wanted to invest more aggressively but was wary of overpaying for stocks, particularly in the volatile healthcare sector, given her already significant financial obligations and responsibilities running her own practice.
We utilized the Graham Number Calculator to assess the intrinsic value of several publicly traded healthcare companies. By inputting their Earnings Per Share (EPS) and Book Value Per Share (BVPS), the calculator identified one company, "MedSolution Corp," with a Graham Number of $75, significantly higher than its current market price of $55. This suggested a potential 36% undervaluation, aligning with Dr. Sharma's value investing goals and risk tolerance.
The Graham Number was calculated using the formula: √(22.5 x EPS x BVPS). Data on EPS and BVPS was sourced from MedSolution Corp's latest annual report and validated using reputable financial data providers.
$20,000 potential gain per 1,000 shares invested, if the market price reaches its Graham Number.
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