Margin of safety
The percentage difference between EPV per share and the market price. A positive value suggests the stock trades below its current business value (excluding growth); a negative one suggests the market is already paying for future growth.
Margin of safety = (EPV per share − Price) ÷ EPV per share
The gap between what you think a company is worth and what you pay for it. It's Benjamin Graham's central idea, and its job isn't to maximize gains but to absorb error: every valuation rests on assumptions, and the margin of safety is the cushion that keeps being wrong about one of them from costing money.
How much to demand depends on how reliable the estimate is: a stable, predictable business justifies a smaller margin than a cyclical, or a company whose valuation hinges on future growth. It's the same logic as the JP Valuation, where the quality of the business governs how much margin is demanded before an entry price is issued at all.
Where to see it on ValuatePad
Year by year, for every company, in the tab EPV & WACC valuation.