Gravity Company Is A Cheap Net Net Again
Jae Jun | Dec 08, 2012 04:14AM ET
The GRVY train came and left pretty quickly. But now it’s back. Back at $1.17 o’clock.
In case you are new to this blog and this company, Gravity Co. (GRVY) is a Korean online game company that I have talked extensively about. Think Zynga (ZNGA).
The company has hit a fresh 52 week low after rocketing up over 100% earlier this year before their flagship game was released in Korea.
The problem was that acceptance in Korea has been slow and their Q3 results are not great. According to the unaudited financials, GRVY has lost money this quarter and their expenses have increased by quite a large amount.
The expenses have increased because of the investment required to launch an English version for international markets.
But at $1.17, forget about how well their game will be received overseas. GRVY has returned as a net net strategy.
- Current price: $1.17
- NNWC: $1.32
- NCAV: $1.63
- Book value: $3.53
- Tangible book value: $2.28
The lowest of all low-ball value of a company is the net net working capital . At the moment, the market again does not believe that GRVY is worth its liquid assets. So we are back to square one again.
I sold quite a bit before all this recent selling, but with the stock price where it is, it is starting to get interesting again.
If investing in GRVY as a net net holding, the opportunity is great. Just need to be extra patient again, but the current price offers excellent value.
However, if this was more of a typical value opportunity, then not so good based on what I’ve experienced so far.
Selling at today’s prices is a bad move. As long as the balance sheet remains intact, even with the occasional losses, I will continue to hold, maybe even add if it goes lower.
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.