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Strategies & Market Trends : Value Investing
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To: Elroy who wrote (74311)11/17/2023 7:08:51 PM
From: Spekulatius3 Recommendations

Recommended By
E_K_S
Lance Bredvold
Sean Collett

  Read Replies (1) of 78673
 
On GRVY - so you have no idea why it is so cheap, but I have:

1) They hoard cash and don’t do anything with it. They don’t pay a dividend or do buybacks. So it’s just like a Japanese stock which often hoard cash in excess of the market cap. It is as if the money isn’t there. If they change capital allocation, the stock will go up, if they don’t, the cash really doesn’t matter and in my opinion subtracting it from the valuation and using EV is questionable. I have owned stocks like this and they almost always underperform. Management can do this for a long time, maybe longer than a decade. Is your timeframe that long ? Most will give up like Paul did after a couple of years with nothing to show for.
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