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Updates on 3 of my Undiscovered Value Stocks: RVY, MHH, BOLT

November 03, 2010 | About:

Jae Jun

67 followers

Gravity Ragnarok 1 Updated and a New Game Added

I’ve been following the activities of GRVY closely lately. I have all my google alerts set up to keep on top of news, updates and any further information about Ragnarok 2.

In the meantime, GRVY has released an updated version of Ragnarok 1 and expanded game availability to the majority of Europe.

GRVY has also become a major shareholder in another Korean game development company named Barunson Interactive. The purchase includes the rights to the game title by the name of Dragon Saga which is now live.

The latest update and Dragon Saga should allow GRVY to keep profits and cash flow break even during the RO2 development and launch period.

GRVY Counter Argument

A counter opinion from a commenter on Seeking Alpha that I found insightful and something to think about.

The problem with RO2 is that it’s a sequel, first of all, to an old game. To get some perspective on what sort of implications this has, imagine if a film maker made a sequel to an incredibly popular film from the 60s. It probably won’t attract young viewers, and will mostly target older viewers who loved the original and are looking for a nostalgic extension. You would probably expect, too, that people would be really concerned with how much it matched the original– after all, it’s really nostalgic for them so they have high standards about keeping ‘the same feeling’. You see that exact same thing about RO2. Just look up RO2 gameplay videos on youtube and read the comments. It’s pretty much nothing but page after page about how RO2 “isn’t the same feeling” as RO1 and how it has disappointed them. Just like how you might expect a movie of the same caliber to flop if it doesn’t run well with the one community that would be excited about it, there might be good reason in this alone to expect a RO2 flop.

To be fair to the above point though, there are cases where sequels to very old games that were significantly different have done really well. A particularly salient example is Starcraft 2 (a game of ATVI ). A lot of SC2 success though has to do with Blizzard’s reputation as a company, their monopoly in RTS (the type of game SC2 is), and their revamping of it to appeal to new users. Also, they did strive to keep some of the essential parts to attract hardcore old school gamers. Last but not least, they promoted SC2 as a highly competitive game with a tournament that boasts a $500,000 cash prize– needless to say, this attracted people too.

Also it should be kept in mind that when RO1 existed and enjoyed its popularity so much, the MMO industry was much, much less competitive than it is now. Back in those days RO1 was one of the few good options out there, especially of those available in Korea. Now there is such a massive range of MMOs to choose from, with some enjoying enormous popularity such as World of Warcraft.

Because MMOs are games that require enormous amounts of time, it is unusual for someone to play more than one MMO. This being the case, for an MMO to succeed people really have to prefer it to all other existing MMOs; this has become an extraordinarily tall order.

Mastech Holdings Not Feeling the Love

MHH certainly doesn’t receive much love. Slight improvements in the quarter showed that the economy is still in difficult times but the company is wading through the mess just fine.

Revenues up, demand for IT staff growing with $1.60 of the $3.30 stock price in cash and no long term debt.

Not much to worry about really. I must admit though that the value of MHH won’t be realized for a while with the economy in its current state.

With all the repositioning and resizing I have been doing to my portfolio this year, MHH has become my smallest position.

Gulf Spill Uncertainty and Fear Passing for Bolt Technology

BOLT reported strong 1st quarter figures and with the deepwater mess quieting down, the stock price has also bounced back up to previous levels. Absolutely nothing wrong with the company fundamentally.

No word of any acquisitions with the cash load BOLT possesses.

Still worth $13-$14 at a minimum. I’ll let time and Mr Market sort things out.

Disclosure

Long GRVY, MHH, BOLT.

Jae Jun

http://www.oldschoolvalue.com/

About the author:

Jae Jun
Saj Karsan founded an investment and research firm that is based on the principles of value investing. He has an MBA from the Richard Ivey School of Business, and an undergraduate engineering degree from McGill University.

Rating: 3.6/5 (13 votes)

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