It's All Gravy

Not a great day for the good guys. My portfolio certainly has a Chinese leaning and it wasn't a good day for Chinese stocks.

CDII -8%
CMED -2.5%
CSKI -2.9%
QXM -5.8%
UTA -5.9%
WH -4.8%

But the good news is that I found a new stock that I suspect will shortly show up on the lists: GRVY. It was up 50% today on stellar earnings (Gravity Reports First Quarter of 2009 Results) and I suspect their chart will look like ADY when they had great earnings last May (ADY went from $19 to $40 in about 2 weeks).

I calculated wht GRVY's ratios would be with the recent quarter added in:

		grvy
+	Operating Income After Depreciation	5.73
-	Minority Interest - Income Account	0.05
=	Income for Calculation	5.67
	Diluted Shares Outstanding	27.796
	Share Price	1.60
+	Market Cap Calc	44.47
+	Preferred Capital	-
+	Debt in Current Liabilities	-
+	Long-Term Debt	-
	Cash and Short-Term Investments	47.34
-	Excess Cash	47.34
=	Enterprise Value	(2.86)
+	Property Plant and Equipment - Net	4.09
+	Receivables	5.12
+	Inventories	-
+	Other Current Assests	4.36
+	Working Cash	-
-	Accounts Payable	2.42
-	Current Liabilities - Other	3.52
=	Invested Capital	7.63
	Earnings Yield	-198%
	ROIC	74%

Look at the numbers. Even after today's 50% run-up, they have a market cap of 44m and 47m of cash (actually now 53m, I did not update that). The shareholder equity is $68m, so they are trading at about 2/3 of book value.

Revenues are ramping up, +32% over last year and up 9% sequentially. If/when the stock crosses the $50m market cap barrier, they should hit the charts as the earning yield is essentially off the chart and ROIC is very good at 74%. Toss that in with growth and trading under BV and this is one appealing stock... and you guessed it, I bought in today.

They are in the online gaming industry, certainly a low capital industry... but also has low barriers to entry. We'll see how it works out.