The Intelligent Investor.

Since it was first published in 1949, Graham's Intelligent Investor has sold millions of copies and has been praised by such luminaries as Warren E. Buffet as "the best book on investing ever written." "Benjamin Graham was a seminal figure on Wall Street and is widely acknowledged to be the father of modern security analysis Security Analysis and The Intelligent Investor are still considered the ‘bibles’ for both individual investors and Wall Street professionals" (The Buffer Stock Project). Graham’s main investment approach outlined in The Intelligent Investor is that of value investing, an investment strategy that targets undervalued stocks of companies that have the capabilities as businesses to perform well in the long run. To determine value, investors use fundamental analysis. Mathematically, by multiplying forecasted earnings over a certain number of years times a capitalization factor of a company, value can be determined and then compared to the actual price of a stock. There are five factors that are included in determining the capitalization factor, which are long-term growth prospects, quality of management, financial strength and capital structure, dividend record, and current dividend rate. To understand these factors, value investors look at a company's financials, such as annual reports, cash flow statements and EBITDA, and company executives' forecasts and performance.