Dissecting Tweedy Browne's Holding of Swiss-Based Tamedia
- By Holmes Osborne, CFA
Tamedia (TAMN.SW) is a Swiss print and online publisher that is a holding of Tweedy Browne (Trades, Portfolio). The company has many divisions that are similar to eBay (EBAY), Ticketmaster, Monster.com and several other well-known U.S.-based online companies. Sales have gone nowhere for five years, but the company could look enticing to one of the many deep-pocketed U.S. online sellers.
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The intrinsic value of XSWX:TAMN
Tamedia has 10.6 million shares outstanding, the stock trades for 139.80 Swiss francs ($143.42), and the market cap is 1.48 billion francs. Earnings per share were 11.62 francs, and the price-earnings (P/E) ratio is 12. The dividend is 4.5 francs, and the dividend yield is 3.22%. The stock is not traded in the U.S. so you'll have to buy on the Swiss exchanges. It takes $1.03 to buy one franc.
Revenues were 1.0448 billion francs in 2016 and were down 5.5% from 2015. EBITDA margins were 20% and net income margins were a whopping 12%. Current assets were 308.9 million francs, and liabilities were 665 million francs. That's a strong balance sheet.
The three main divisions are: Regional Publishing, which accounts for 44.6% of sales; National Publishing, which accounts for 33.6%, and Digital, which accounts for 21.1%. Print was down quite a bit from the previous year, but Digital was up. Sales and net income have been flat since 2012.
Some of the larger publications and magazines include: 20 Minute GES (442,994 subscribers), Das Magazine (329,266) and Metropress (320,000). Every print publication was down at from single to double digits in readership except a publication named Rumlager which was up a tiny 0.1%. But the website traffic was up big. Some even up 50% over the prior year.
The Digital division has many of the same features as we have in the U.S. There are job searches, property listings and information on used items. Tamedia made several acquisitions last year of various sites in Europe and Israel.
From what I see, a family named Coninx owns at least half of the shares, maybe more. Tweedy Browne owns 4.52%. I don't see many other institutional investors with which I'm familiar.
I looked at some of Tamedia's websites, and they are quite interesting. One is Doodle which is an online meeting organizer, I guess, kind of like Google Calendar or when someone sends you an invitation that goes straight to your phone. Homegate is a Swiss version of Trulia or any other property search engine. Jobsearch is like Monster.com. Ricardo is the Swiss answer to eBay. Guide TV is similar to - you guessed it - TV Guide. Starticket is like Ticketmaster. Tamedia just sold 20% in something called Hotelcard. I'm guessing this is a lot like Hotels.com.
You can see what management is trying to do. It's trying to keep up with the web and transition out of print into the internet. The only thing is that its little businesses don't seem to keep up with the American counterparts. I assume if you live in Switzerland, you might as well use eBay. I know I've sold stuff on eBay to people located all over the world. You just make the buyer pay for a U.S. Priority envelope.
As an investment, Tamedia is intriguing. You could see some giant like Amazon (AMZN) just snap it up for 2 billion francs or more. It would barely get a mention in the U.S. I see Tamedia as a decent value stock. M&A (mergers and acquisitions) is a subset of value investing as you are guessing that a buyer is willing to pay more than the stock is trading for. I can see why Tweedy Browne bought shares. Tweedy Browne has an eclectic portfolio of Swiss and European companies. We've made money mining their ideas.
Disclosure: We do not own shares.
This article first appeared on GuruFocus.
Warning! GuruFocus has detected 3 Warning Signs with XSWX:TAMN. Click here to check it out.
The intrinsic value of XSWX:TAMN
