On May 7, 2015 we sent an e-mail to our premium members, when MER Telemanagement Solutions (NASDAQ:MTSL) was trading at around $2.00, that with the recent acquisition of Vexigo we felt shares could reach a stock price target of $2.70 based on a P/E multiple of 15 on the company’s fully taxed diluted EPS run rate of $0.18 for the next 12 months. On May 8, 2015 we subsequently made it known that our members were able to take advantage of this arbitrage opportunity and that those who heeded our research turned a potentially sizable profit.
MTSL Shares Reached GeoInvesting Price Target of $2.70
Shares have since reached our initial price target of $2.70. However, we believe it is possible that investors will apply valuation multiples based on actual EPS, since MTSL has years of losses to carry forward and will likely not pay a full tax rate. Therefore, we believe aggressive valuations could still lead to upside in shares.
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