Subs: A Sweet Valuation $$

• Posted by ToddSullivan
• on January 6th, 2010

An update on a holding that on a pure valuation metric, is very nice indeed

iGo (IGOI)

Regular readers know we use this basic spreadsheet analysis as a starting point then move forward to dive into the business. I will do a better job in the future updating current holdings on a more regular basis. We are looking for a per share value of the most liquid of assets – debt and payables. We discount both payables and inventory (hopefully LIFO valuation) values and we give no value to property, plant or equipment. We want as little fluff in the numbers as possible. Ideally this number makes up well in excess of 50% of the current share price.

If it does, we go much deeper.

Note: This does not work for all businesses. For instance, it will not work for REIT’s,  MPL’s or Financials that typically carry higher debt loads as a normal course of business.

Since we already like iGo as we own it and like the direction the business is going, how is the current valuation looking? As of  9/30 reporting:

Simply put buying shares of iGo at these levels  means for every $1 you spend on a share of stock, you are getting $.94 of liquid assets back. Then you are getting the value of property plant equipment (whatever you deem that to be) AND operating performance for free.  It’s a good deal….

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