BUY MTSL at $1.25

MER Telemanagement Solutions. (NASDAQ–MTSL)

Valuation-$3.56

Price September 22, 2015-$1.25

We are reviving MTSL. We were in this before in 2011 and had a nice run for over a 100% gain. Since then a lot has happened. They lost some customers from their legacy business and now have bought a company-Vexigo, that closed in April 2015.

Their latest earnings were for the second quarter ended 6/30/2015 and included a full quarter of Vexigo. Revenues were $4.8 million up from $1.7 million last year and they posted a Non- GAAP income of $.02 a share versus a loss of $.06 million last year.

MTSL does have a potential liability for an earn-out payment of up to $16 million over the next 5.5 years related to the acquisition.

MTSL had $3.5 million of net cash or $.45 a share. Trading at only 35% of our valuation, with 40%+ gross margins, we think this is a BUY.

There are about 8 million shares outstanding and it trades only about 38,000 shares a day.

About MTSL: Mer Telemanagement Solutions Ltd. (MTS) is a provider of video advertising solutions for online and mobile platforms through Vexigo as well as a provider of innovative products and services for telecom expense management (TEM), enterprise mobility management (EMM), mobile virtual network operators and enablers (MVNO/MVNE), billing mobile money services and solutions and an IOT/M2M enablement platform used by mobile service providers.

Vexigo (www.vexigo.com) is a global provider of online video advertising software and services delivering compelling results through a propriety in-house technology and an easy-to-use and very effective publishing platform specifically designed for content publishers.

Headquartered in Israel, MTS markets its solutions through wholly owned subsidiaries in Israel, the United States and Hong Kong and through distribution channels..

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