Harris Interactive a reliable cash flow generator

Billionaire investor Vincent Bollore’s continued interest in microcap play Harris Interactive Inc. (Nasdaq:HPOL) deserves a closer look.

Ranked as one of the world’s richest people by Forbes magazine, Bollore has focused his attention in recent years on making media-related investments. The French billionaire is a major shareholder and chairman of Havas SA, the world’s sixth-largest advertising agency holding company. Havas is the owner of the Euro RSCG Worldwide agency. Bollore is also a major shareholder in British media services holding company Aegis Group. Bollore has spent the past two years trying to gain control of Aegis.

Last year, published reports indicated that Bollore was interested in increasing his investments in the market research sector. In April of 2007, Bollore popped up as a 6% shareholder in Harris Interactive. The custom market research shop’s roots trace back to the founding of Louis Harris & Associates over 50 years ago. Rochester, N.Y.-based Harris is best known for The Harris Poll, one of the longest-running independent opinion polls in the United States. Over the past 52-weeks, Bollore has purchased over $2.6 million worth of Harris shares on the open market.

So far, Bollore’s investment in $78 million market capitalization Harris has been a loser. Since opening 2008 around the $4 level, Harris shares have steadily declined, as demonstrated by the recent stock price of $1.45. Harris shares have been punished the past two quarters particularly for company management falling short of meeting projections and poorly managing expectations. 

For the fiscal third quarter ended March 31, Harris reported revenue of $57.3 million, an 11% annual increase. However, this gain was largely acquisition-driven. Organic revenue actually declined 4% year over year. The loss for the quarter was $2.1 million, or $0.04 a diluted share, compared with net income of $1.2 million, or $0.02 a diluted share, for the year-ago period. Earnings before adjusted EBITDA for the quarter declined 58% to $1.6 million from $3.9 million. Harris blamed the decline primarily on revenue shortfalls in its U.S. health-care business, which has been . . .

For access to the full article, you must be a registered member - it's FREE.

Already a member? Please log in below