New Ben Graham Net Net Idea

Benjamin Graham in The Intelligent Investor argued that a sufficiently low price can turn a security of mediocre quality into a sound investment opportunity provided he practices adequate diversification and the buyer is informed and experienced.

I’m reluctant to mention this idea but the market has taken out so many ideas based on valuation. So here it goes.

LOOK (LookSmart, Ltd)

Yahoo Quote

Per share value

Price: $1.00 ($17,150,000)

Cash+ AR- Total Liabilities: $1.19

EV: $.15 (2,657,000)

Cash: $1.58

Liabilities: $.79

Net Tangible Assets: $1.42

AR: $.34

Sales: $3.15

GP: $1.15

In the recent conference call the new CEO (Dr. Jean-Yves Dexmier) was not pleased with the fourth quarter results. His ultimate solution was to hire additional data analysts. Not sure this is the answer but understanding the customers desired metrics and how to improve may be helpful to improve financial results. Let’s hope they get it right before it’s too late.


Concentrated customer source:
Decreasing margins