Mittleman Brothers’ New Addition: Tremor International (TRMR)

Investment management company Mittleman Brothers Investment Management released its “Global Value Equity Fund” second quarter 2022 investor letter. A copy of the same can be downloaded here. The fund declined 17.6% in the second quarter compared to a 7.9% decline in the MSCI ACW Net Total Return Index. Only Heritage-Crystal Clean, the fund’s new addition, contributed positively to the fund’s performance. For more information on the fund’s top picks in 2022, please check its top five holdings.

In the letter, Mittleman Brothers discussed stocks like Tremor International Ltd (NASDAQ:TRMR). It is an advertising technology company headquartered in Tel Aviv-Yafo, Israel. The stock of Tremor International Ltd (NASDAQ:TRMR) closed at $11.18 per share on August 11, 2022. One-month return of Tremor International Ltd (NASDAQ:TRMR) was -17.44%, and its shares lost 45.30% of their value over the last 52 weeks. Tremor International Ltd (NASDAQ:TRMR) has a market capitalization of $829.247 Million.

Here is what Mittleman Brothers specifically said about Tremor International Ltd (NASDAQ:TRMR):

“MIM’s second new position was bought in mid-July, so a full write-up will be provided in the Q3 letter, but to summarise it briefly here, MIM initiated a 2.5% weighting in the ADRs of Tremor International Ltd (NASDAQ:TRMR). Tremor International is a leading advertising technology company that Chris has come to know only over the past year or so, and was purchased at an average cost of $9.71, with an estimated fair value of $20 implying just over 100% upside potential. Tremor International is a fast growing, FCF generative, ad tech business with a net cash balance sheet. MIM bought TRMR (the ADRs, the main listing is London) at just under $10 on average, and view fair value as 8x EBITDA of $175M, plus $118M in net cash, which equals just over $20 per ADR. If the historical growth rate continues that number will prove vastly too conservative. If a severe recession occurs and ad spending collapses, it may seem optimistic for the next year or so. Given the pristine balance sheet, and the inherently cash-generative nature of this business, MIM is willing to take the risk that the macro winds might blow against it in the short to intermediate term. Long term, MIM thinks digital advertising, and the way in which ad tech companies like Tremor facilitate it, provides a long growth trajectory to exploit.

Tremor is headquartered in Tel Aviv, Israel, which is second only to Silicon Valley in terms of the concentration of tech startups and talent there. Tremor has grown quickly via acquisitions and organically.”

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Tremor International Ltd (NASDAQ:TRMR) is not on the list of  30 Most Popular Stocks Among Hedge Funds. As per our database, Tremor International Ltd (NASDAQ:TRMR) was held by 8 hedge fund portfolios at the end of the first quarter, which was 9 in the previous quarter. You can check our hedge fund investor letters Q2 2022 page for more investor letters from hedge funds and other prominent investors.

Disclosure: None. This article is originally published at Insider Monkey.