Follow-up: 11 88 0 Solutions AG (telegate AG)

Q4 2016 – 0,48 € – ETR:TGT

After my thirteen months follow-up I have decided to sell my position in TGT. After brokerage fees and currency effects the return amounted to -51,7 %.

1kr50öre11 88 0 Solutions AG, formerly Telegate AG, is a Germany-based provider of directory assistance and call center services. The Company operates through two segments: Directory Assistance and Digital. The Directory Assistance segment provides services related to inquires made at by phone for information regarding to phone numbers, pre-dial numbers and addresses. The Digital segment receives revenue from advertisements on the Company’s platforms and Websites. The Company also offers online marketing services related to Google AdWords, Google My Business, social media Websites and company profiles on platforms, as well as tools and market analyses, and software for data, address and network management. – Google Finance.

1. The company is currently a net-net with an adequate margin of safety: 

  • P/NCAV < 1x
    • 0,75x ✓ 
      • MoS = 25 %
    • 1,7x (incl. operating leases).

Assessment of margin of safety:

Although the company is still a net-net and makes it through the rest of my checklist I regard the current margin of safety as inadequate. This is based on an assessment of the NCAV-brun rate that is negative for both YoY = -41 % and QoQ = -20 %. In other words, there is a high probability that the NCAV will continue to erode in a quick pace and that the 25 % margin of safety is gone by next follow-up. Also, taking operating leases into consideration the company is no longer to be regarded as a net-net as it is selling at a premium, 1,7x. This is relevant since TGT uses IFRS and the changes to be effective as of 1 January 2019 with IFRS 16 (operating leases are to be capitalized). Based on these notations and that I haven’t found any other value creation catalyst I have decided to sell my position in TGT.

2. The risk of permanent loss is low:

2.1 The risk of bankruptcy is low (criterion a) or b) must be met):


  • Debt/Equity < 25 %
    • 0 % 


  • Z-score ≥ 3
    • 0,2 X

2.2 The company’s business model has historically been profitable (criterion a) or b) must be met):


  • Positive retained earnings:
    • -28M € X


  • Positive aggregate operating income for the last ten years:
    •   118M € 

3. The company does not have a shareholder unfriendly capital allocation:

  • Shareholder yield TTM ≥ -2 %
    • Dividend yield TTM = 0 %
    • Net buyback yield TTM = 0 %
      • =  0 % 


Disclosure: The author doesn’t own any shares of ETR:TGT when this analysis is published.


telegate AG (TGT)

Q3 2015 – 1,01 EUR– ETR

Telegate AG is a Germany-based provider of directory assistance and call center services. The Company operates in two segments: Germany/Austria with sub-segments: Directory Assistance and Media, and Spain. In Germany, the Company offers telephone directory enquiries and information services via the telephone number 11880, which is available from both the fixed network and from German mobile telephone networks. For private customers, it provides information via telephone directory assistance, Internet research, klickTel CD-ROMs and software solutions, as well as via the directory assistance services for mobile devices. Business customers are offered outsourcing solutions for the directory assistance of land-based or cellular telephone carriers, inbound or outbound call centre contracts and marketing directory assistance platforms. – Google Finance

1kr50öre1. Bolaget är ett net-net:

  • P/NCAV < 1x
    • = 0,81x
      • = 18,6 % MoS

2. Bolaget har en sund verksamhetstrend:

  • F-score ≥ 4
    • = 4

3. Risken för permanent förlust är låg:

a) Konkursrisken i bolaget är låg (minst ett av nedanstående kriterium måste uppfyllas):

  • Räntebärande skulder/Eget kapital < 20 %
    • = 0
  • Z-score ≥ 3
    • = 1,9

b) Bolagets affärsmodellen är inte helt olönsam (minst ett av nedanstående kriterium måste uppfyllas):

  • Positivt balanserat resultat
    • = -9 624 kEUR
  • De aggregerade resultatet (EBIT) under de senaste 10 åren är starkt positivt
    • = 184 972 kEUR

4. Risken för utspädning är låg:

  • Bolaget säljer inte aktier:
    • Ingen utspädning QoQ eller YoY.

5. Risken för fraud är låg (“bedömningsfråga”):

  • Bolagsdata existerar för minst 10 år:
    • Ja
  • Bolaget har historiskt skiftat ut kapital till aktieägarna:
    • Bolaget har under de senaste tio åren givit utdelning till aktieägarna.
  • Starkt insiderägande (∽10-40 %):
    • = N/A, huvudsakligen institutionellt ägande
  • Bolaget är inte huvudsakligen kinesiskt (huvudverksamhet eller majoritetsägare)
    • Tyskt bolag med huvudsaklig tysk verksamhet.

Klarar bolaget samtliga krav?



Disclosure: Jag har en position i TGT när denna analys publiceras.