Graham Net Net Stock IGOI


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With the market up significantly since the March bottom, it’s been very hard to find any more deep value net net stocks but IGOI is a company that I currently own that is still a pure Graham Net Net and things look to be improving while many net net stocks have gone under or are still flirting with bankruptcy and other severe problems.

IGOI Spider Graph Business Valuation

This spider graph is from the business valuation I posted on previously. After 1 quarter, the state of the company and investment still remains the same.

igoi-spider

Net Net Working Capital Calculation

Do remember that when I calculate net nets, I use the pure Graham net net working capital formula. i.e. only considering the real tangible assets, whereas other investors usually take into account other and long term assets.

Net Net Working Capital = Cash and short-term investments + (0.75 * accounts receivable) + (0.5 * inventory) – total liabilities

Even if there is value in its goodwill and other long term assets, if a company is selling for less than the Graham Net Net value and is not losing money, it truly is misunderstood and undervalued.

iGo Inc Net Net Value – Q1

Below is the net net value for IGOI after the Q1 release. As you can see, their balance sheet is healthy with a liquidation value of 94c.

igoi-stock-analysis-q1-2009

iGo Inc Net Net Value – Q2

The 2nd quarter numbers in the yellow fields, now shows an equally strong balance sheet with an increase in cash, reduction in receivables by collecting payments from customers, lowered inventory and liabilities.

IGOI has done a lot of good work within just one quarter which also explains how they managed to profit off lower revenue in the 2nd quarter.

The result is that the net net value has now increased to $1.01. An increase in value from $0.94 to $1.01 isn’t huge or scream worthy, but for a net net to achieve this is quite impressive.

igoi-stock-analysis-q2-2009

Disclosure

I hold IGOI at the time of writing.

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