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marketsailor1945 (64.71)

I Need A Finance Geek

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July 23, 2013 – Comments (3) | RELATED TICKERS: GRVY

I am looking at the company Gravity, co. LTD. Boasting a huge proportional book value and strong managment, I think one could benefit from a potential future liquidation.

 

The only issue is the cash flow-- it's negative.

 

Correct me if I am wrong, but a negative cashflow normally leads to bankruptcy. Is it safe to invest in a company with a neative cashflow given they have a sizable amount of cash on hand?

 

Thanks in advance! 

3 Comments – Post Your Own

#1) On July 24, 2013 at 1:57 AM, somrh (82.28) wrote:

Well, it's only been negative cash flow the last couple of years. And negative cash flow isn't bad in of itself so long as it's a result of assets being invested (preferably at high rates of return).

With regard to the specific company, you might check OSV. Jae's owned the stock for a few years now and there are a number of blogs and a forum thread dedicated to that stock.

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#2) On July 24, 2013 at 9:39 AM, marketsailor1945 (64.71) wrote:

Thank you!

 

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#3) On July 24, 2013 at 3:00 PM, constructive (99.96) wrote:

To invest in individual companies, especially small companies, you don't need to talk to a finance geek. You need to become a finance geek.

And yes, GRVY's cash flow over the past year is problematic, and management doesn't seem strong to me.

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