GRANITE REAL ESTATE INVESTMENT TRUST

Where It Passes

Where It Falls Short

• Efficiency0% pass✓ 1✗ 10▾

  No clean pass — all 8 investors flag at least one efficiency criterion

  Current Ratio

  ✗Graham>= 2.0

  ROIC (3-5 yr avg)4.0%

  ✗Buffett> 10%

  ROIC - WACC-6.0%

  ✗BuffettPositive (WACC = 10%)

  EBIT / (NWC + Net Fixed Assets)

  ✗Greenblatt> 25%

  Current Ratio Change YoY

  ✗PiotroskiIncreased YoY

  Revenue / Total Assets Change YoY0.06x -> 0.06x

  ✓PiotroskiImproved YoY

  Current Assets / Current Liabilities

  ✗Dreman> 1.5

  Return on Invested Capital4.2%

  ✗Munger> 15%

  ROIC (high and growing)FY2022: ROIC=3.6%; FY2023: ROIC=4.2%; FY2024: ROIC=4.2%

  ✗AkreLatest 3 consecutive FYs: ROIC > 15% in each

  Reinvestment Rate x ROIC1.8% (RR=42% x ROIC=4.2%)

  ✗AkreReinvestment Rate * ROIC > 10%

  ROIC (5-year)0/5 years above 12% (latest 4.2%)

  ✗SleepROIC > 12% in a majority of years
• Profitability13% pass✓ 10✗ 25▾

  14 of 16 flag GRTUF's profitability — Graham, Buffett, Lynch +11 more

  Net income / market capitalization+6.72%; #1237/6340 (top 19.5%)

  ✓AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Positive EPS (10 years)2/13 years positive

  ✗GrahamPositive EPS every year for 10 years

  EPS Growth (3-yr avg, 10-yr window)

  ✗Graham>= 33% growth

  Net Income Positive (10+ years)11/13 years positive

  ✗BuffettPositive every year for 10+ years

  ROE (up to 5-year arithmetic mean)9.5%

  ✗Buffett> 15% arithmetic mean (app rule)

  Operating Margin (10-yr trend)82.9% (latest)

  ✓BuffettStable or rising over 10 years

  Free Cash Flow Proxy$252.1M

  ✓BuffettPositive and growing

  Earnings Variance (10-yr CoV)

  ✗BuffettCoV < 0.3

  Retained Earnings Effectiveness

  ✗Buffett$1 retained -> > $1 market value created

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR

  ✗Lynch15-30% (Fast Grower); > 0% to pass

  ROE6.3%

  ✗Lynch> 15%

  EBIT / Enterprise Value5.7%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=5.7%, ROC=None

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Net Income / Total Assets3.75%

  ✓PiotroskiROA > 0

  ROA Change YoY1.51% -> 3.75% (delta: +2.24%)

  ✓PiotroskiCurrent ROA > Prior ROA

  (CFO / Total Assets) vs ROA

  ✗PiotroskiCFO/Assets > ROA

  Gross Margin Change YoY

  ✗PiotroskiImproved YoY

  Pre-Tax Income / Revenue69.0%

  ✓Dreman>= 8%

  Net Income / Shareholders' Equity6.3%

  ✗Dreman> 12%

  Margin of SafetyP/FFO=15.0x

  ✓PabraiP/FFO < 15

  Return on Equity3.9% (3-yr avg)

  ✗AkreROE > 20% (3-year avg)

  Discount to Intrinsic Value

  ✗Marks>= 20% below intrinsic value

  Positive Net Income Frequency11/12 years positive

  ✓MarksPositive net income in >= 7 of last 10 years

  Operating Income / Revenue82.9%

  ✓Ackman>= 15%

  Net Income / Shareholders Equity6.3%

  ✗Ackman>= 15%

  5-Year EPS CAGR

  ✗Templeton> 0% (5-year EPS CAGR)

  Operating Margin Trend83.5% (2022) -> 82.9% (2024)

  ✗TempletonNon-negative operating-margin trend over 3 years

  Revenue growth vs. gross and operating margin trendrevenue up, operating margin 83.5% -> 82.9%

  ✓SleepRevenue rising; gross margin flat or falling; operating margin holding

  Gross profit / total assets

  ✗AsnessTop 30% of eligible cross-section

  Net income / positive book equity+6.30%; #2302/5226 (top 44.0%)

  ✗AsnessTop 30% of eligible cross-section

  Negative 5-year standard deviation of ROA-0.0510; #2609/5884 (top 44.3%)

  ✗AsnessTop 30% of eligible cross-section

  3-5 Year Diluted EPS CAGR

  ✗Neff7%-20% annualized

  Positive Diluted-EPS Years

  ✗Schloss>= 70% positive over 5-10 observed years (app rule)
• Debt & Leverage25% pass✓ 5✗ 10▾

  9 of 12 flag GRTUF's debt & leverage — Graham, Buffett, Lynch +6 more

  LT Debt vs Net Current Assets

  ✗GrahamLT Debt <= Net Current Assets

  Debt/Equity & Interest CoverageD/E: 0.53, IC: 5.3x

  ✗BuffettD/E < 0.5 AND Interest Coverage > 5x

  Total Debt / Equity0.53

  ✗Lynch< 0.33

  Cash - Long-term Debt

  ✗LynchPositive preferred

  LT Debt / Total Assets Change0.00% -> 0.00%

  ✓PiotroskiDecreased YoY

  Current Assets / Current Liabilities

  ✗Dreman> 1.5✗SchlossCurrent ratio >= 1.50x (app cutoff)

  Total Debt / Shareholders' Equity0.53

  ✓Dreman< 0.8✓Templeton< 1.0 (fixed cap; proxy for below-sector-median leverage)✓SchlossD/E < 1.00x

  Debt Levels0.53

  ✗MungerDebt/Equity < 0.5✗AkreDebt/Equity < 0.3

  Interest Coverage & Debt/EBITDAIC=5.3x, D/EBITDA=6.5x

  ✗MarksInterest Coverage > 3x; Debt/EBITDA < 4x

  Total Debt / Shareholders Equity0.53

  ✓Ackman<= 1.0

  Negative debt-to-equity (higher means less debt)-0.5330; #2537/4210 (top 60.3%)

  ✗AsnessTop 30% of eligible cross-section
• Growth25% pass✓ 6✗ 7▾

  6 of 8 flag GRTUF's growth — Graham, Lynch, Dreman +3 more

  EPS Growth (3-yr avg, 10-yr window)

  ✗Graham>= 33% growth

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR

  ✗Lynch15-30% (Fast Grower); > 0% to pass

  Inventory Growth vs Revenue GrowthN/A (no inventory)

  ✓LynchInventory growth < Revenue growth

  EPS Growth Direction$-1.13 (2010) -> $1.53 (2012)

  ✓DremanPositive over recent years

  EPS CAGR

  ✗Dreman> 5% annualized

  Positive Net Income Frequency11/12 years positive

  ✓MarksPositive net income in >= 7 of last 10 years

  3yr Median Revenue Growth8.9%

  ✓Ackman>= 5%

  Positive EPS Growth Frequency

  ✗AckmanPositive EPS growth in >= 3 of last 5 years

  5-Year EPS CAGR

  ✗Templeton> 0% (5-year EPS CAGR)

  Revenue growth vs. gross and operating margin trendrevenue up, operating margin 83.5% -> 82.9%

  ✓SleepRevenue rising; gross margin flat or falling; operating margin holding

  5-year Revenue CAGR13.6%

  ✓SleepCAGR > 7%

  3-5 Year Diluted EPS CAGR

  ✗Neff7%-20% annualized
• Valuation models25% pass✓ 1✗ 3▾

  Models split on GRTUF at $60.23 — fair values range $22.19–$154.39

  Buffett fair value$47.50

  ✗Buffett-26.8% margin vs $60.23

  Greenblatt fair value$39.40

  ✗Greenblatt-52.9% margin vs $60.23

  Pabrai fair value$22.19

  ✗Pabrai-171.4% margin vs $60.23

  Akre fair value$154.39

  ✓Akre+61.0% margin vs $60.23
• Cash Flow33% pass✓ 2✗ 5▾

  4 of 6 flag GRTUF's cash flow — Piotroski, Dreman, Neff +1 more

  Free Cash Flow Proxy$252.1M

  ✓BuffettPositive and growing

  Operating Cash Flow

  ✗PiotroskiCFO > 0

  (CFO / Total Assets) vs ROA

  ✗PiotroskiCFO/Assets > ROA

  Price / (CFO / Shares)

  ✗Dreman< 8x

  Positive Operating Cash Flow frequency11/11 years positive

  ✓SleepPositive OCF in >= 70% of available years

  Operating Cash Flow - Capital Expenditures

  ✗Neff> $0 (app proxy for a strong fundamental case)

  (Operating cash flow - capex) / market capitalization

  ✗OshaughnessyTop 10% of eligible cross-section
• Valuation38% pass✓ 10✗ 15▾

  8 of 13 flag GRTUF's valuation — Lynch, Greenblatt, Dreman +5 more

  Price / FFO per Share15.0x

  ✓Graham<= 15x✗Dreman< 12x✓Ackman<= 25

  Price / Book Value per Share0.9x

  ✓Templeton< 1.5x✗SchlossP/B <= 0.80x (app cutoff)

  Net income / market capitalization+6.72%; #1237/6340 (top 19.5%)

  ✓AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  EBIT / Enterprise Value5.7%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=5.7%, ROC=None

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Price / (CFO / Shares)

  ✗Dreman< 8x

  Valuation ReasonablenessOE Yield=6.7%

  ✓MungerP/E < 25 or Owner Earnings Yield > 5%

  P/FFO or FFO YieldP/FFO=15.0x, FFO Yield=6.7%

  ✓PabraiP/FFO < 15 or FFO Yield > 10%

  P/B or P/E vs. Historical AverageP/B=0.9x

  ✓MarksP/E < 15 or P/B < 2.0

  Discount to Intrinsic Value

  ✗Marks>= 20% below intrinsic value

  Price / EPS

  ✗Templeton< 12x (fixed ceiling; proxy for the market's cheapest 40%)

  Price vs. Trailing Low131% of trailing low ($45.84)

  ✗Templeton<= 120% of trailing low (certified split-adjusted live window)

  Positive book equity / market capitalization+1.0675; #1370/6449 (top 21.2%)

  ✓AsnessTop 30% of eligible cross-section

  Price / Diluted EPS

  ✗NeffP/E <= 15x (app proxy for a P/E 40%-60% below the market)

  (EPS CAGR % + Dividend Yield %) / P/E

  ✗Neff> 0.7 (Neff's published traditional edge)

  Price / Tangible Book Value per Share0.95x

  ✓SchlossP/TBV <= 1.00x (app cutoff)

  Book Value per Share Change+42.8%

  ✓SchlossLatest BVPS >= earliest BVPS over >= 3 years (app rule)

  Revenue / market capitalization+0.1061; #4307/5247 (top 82.1%)

  ✗OshaughnessyTop 10% of eligible cross-section

  (Operating cash flow - capex) / market capitalization

  ✗OshaughnessyTop 10% of eligible cross-section

  Trailing six-month price return through the evaluation date-14.08%; #3667/6202 (top 59.1%)

  ✗OshaughnessyTop 10% of eligible cross-section
• Verdicts45% pass✓ 5✗ 6▾

  Split decision: 6 FAIL · 5 NEUTRAL · 4 PASS · 1 BUY

  Overall verdict

  ✗GrahamFAIL (2/7)✗BuffettFAIL (2/9)✗LynchFAIL (2/7)•GreenblattNot ranked✓PiotroskiPASS (F-Score 5)✓DremanPASS (5/10)✓MungerPASS (2/4)•PabraiNEUTRAL (2/3)✗AkreFAIL (1/6)✗MarksFAIL (3/5)•AckmanNEUTRAL (7/9)✓TempletonPASS (4/8)✓SleepBUY (5/6)•AsnessNEUTRAL (Not ranked)✗NeffFAIL (2/6)•SchlossNEUTRAL (4/7)•OshaughnessyNEUTRAL (Not ranked)