Closing price May 23, 2008-$2.15

With this unbelievably bad market in 2008, we have not recommended anything in a while. We watch maybe 100 stocks that we think might be interesting at any one time. In 2008, these stocks have just been getting cheaper and cheaper. So picking a bottom has been problematic. But we have decided to take the plunge.

This is the venerable Harris polling company, now with online capabilities of course. HPOL reported Q3 2008 (March 31, 2008) on May 2, 2008. They were disappointing, with organic sales down 4%, while acquisition aided total revenues were up 11%. They also had a net loss of $2.1 million compared to a profit of $1.2 million in 2007. Adjusted EBITDA was still positive ($1.6 million).

Despite this lackluster Q3, they are projecting about $240 million in sales for FY 2008 (about $65 million in revenue in Q4) and adjusted EBITDA of $17-19 million for the year.

HPOL has about an equal amount of cash and debt ($31 million).

Trading at 36% of our valuation and less than 50% of sales, this looks like a good time to buy. The 52 week low for HPOL was $1.93 and the high–$5.71. The Harris name alone is a key asset, as the brand is highly recognizable to just about everyone.

HPOL trades over 300,000 shares a day, so liquidity is not an issue here.

There are about 57.7 million fully diluted shares outstanding.

About Harris Interactive
Harris Interactive is a global leader in custom market research. With a long and rich history in multimodal research, powered by our science and technology, we assist clients in achieving business results. Harris Interactive serves clients globally through our North American, European and Asian offices and a network of independent market research firms.


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