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 Tracking 1271 U.S. listed China Stocks and Counting...
 Tracking 3167 U.S. Stocks and Counting...

 Mer Telemanagemen (NASDAQ:MTSL)

YesRecent 52-week high
Yes30% Earnings Per Share (EPS) growth rate
No10% revenue growth year over year
NoStrong balance sheet
Yes15% minimum return on equity (ROE)
Yes8% minimum pre-tax margins
YesUnder 50 million shares outstanding
NoHigh insider ownership
YesLimited institutional ownership
YesP/E at least 1/2 of EPS growth rate

On 1/22/2013 we added MTSL to the GeoBargain list @ $3.55

Catalyst:  After years of reporting losses the company returned to the black in 2010 and 2011, reporting non-GAAP EPS of $0.04 and $0.21 respectively. Furthermore, the company had grown quarterly non-GAAP EPS for 11 straight quarters.  Please see our original report here.

We are now removing MTSL from the GeoBargain List @ $2.86

Current road block: While the company could report as much as $0.80 in earnings for 2013, comments in the company’s 20-F filed mid day yesterday implies that 2013 revenue growth will only slightly increase from the 2012 level of $13.1 million.  It seems that the company it is not comfortable baking in additional revenue from new customers that are needed to replace the anticipated loss in revenue from the loss of an MVNO customer, Simple Mobile that will occur in 2014.   In order to replace Simple Mobile revenue ($3.6 million) the company will have to obtain a significant amount of customers; especially when considering the terms of  a relationship with a new customer that typically calls for revenues of $500,000 that can span over a 3 year period. Although it is possible that a new customer can exceed these contracted values and that MTSL could land a larger customer, these are unknown outcomes we are not willing to bear at this time given statements made in the 2012 20F.  We will continue to monitor MTSL for any new developments and will now place MTSL on our GeoBargain on the Radar list.

Peak performance: Reached a high of  $5.49 on 3/15/2013 for a maximum potential return of 55%.

Thursday, March 21, 2013