By Aaron Katsman
IsraelNewsletter.com

So I am sitting in front of my computer and all of the sudden I look up at the wire and see the following: Radcom halves revenue view; suspends financial outlooks. Keep in mind that when I learned to read in kindergarten I was taught with the method of word recognition. Which means that you look at some of the letters and basically guess as to what the word is. So when I saw Rad… I just assumed that Radware (RDWR) was the company that warned. As I posted Radware has a propensity for warning, I think we are up to 5 quarters in a row, and I was about to dump the stock back then but decided to hold. Then a few weeks ago CIBC upgraded Radware, and my collegue Zack Miller was singing my praise.

Well, I decided to actually read the story and much to my delight, after deciphering all the letters I found out that Radcom (RDCM) was the one that warned. Again nothing new, as they have a nice track record of warning as well. The only bright spot is that I learned my lesson and I sold my position after last quarter’s warning. Radcom develops, manufactures, markets and supports innovative network test and service monitoring solutions for communications service providers and equipment vendors. The Company specializes in Next Generation Cellular as well as Voice, Data and Video over IP networks. In the press release the company said, “The second quarter was another disappointing period for us, reflecting both market conditions and the fact that we are still in the process of solving a variety of tactical execution issues.” 

When a company says they are trying to solve some “tactical execution issues,” it should be cause for worry, and avoidance of the stock would be prudent. But in this case, something interesting has recently happened. On the 29th of May it was reported that  Zohar Zisapel, Chairman and largest shareholder, had acquired 263,300 RADCOM shares during the month of May through purchases on the open market.  Zisapel now holds 3,626,342 RADCOM shares, representing 22.2 % of the Company’s issued share capital.

Usually I would advise investors to stay clear after a warning the likes of which came out today. But with continued insider purchases, I would keep an eye out for some good news, which may indicate the company is turning the corner.

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Disclosure:  Author does not hold positions in RDCM. He is long RDWR as of 7/3/07. 

Aaron Katsman is the lead portfolio manager for the Israel Growth Portfolio and Managing Director of America Israel Investment Associates, LLC. For more information, go to www.israelnewsletter.com or call 1-888-327-6179, or email aaron@profile-financial.com.

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Douglas Goldstein, CFP
www.IsraelNewsletter.com

Even though Teva (TEVA) has risen 33% this year, Goldman Sachs (GS) still believes that they have a long way to go.  According to The Marker, at month-end Teva will be announcing its second-quarter results and Goldman Sachs got in ahead of the event and raised its estimate to 58 cents earnings per share in the quarter, and $2.28 per share for the year 2007. They put a 12 month target price for the stock at $48. 

GS notes that positives for the stock include:

1. The launch of generic Lotrel, a medicine to beat high blood pressure that Teva released on May 18.
2. The copycat version of Oxycodone, a powerful and addictive opioid used to relieve moderate to terrible pain that is also popular among drug abusers.
3. ProAir, an inhaler that Teva inherited when buying Ivax Corp. Sales of ProAir have handily beaten expectations. Goldman Sachs notes that ProAir sales benefited “dramatically” from Teva marketing combined with the transition from inhalers that destroy the ozone layer, to environmentally-friendly ones.

On the other hand, competing Tysabri (developed by Biogen Iden) has been reinstated for use by select multiple sclerosis sufferers in Britain, where it competes with Teva Pharmaceuticals’ Copaxone as a therapy for the incurable neuri-degenerative disease. Tysabri had clinical problems when two patients taking their drug died. However, Tysabri is staging a gradual comeback, mostly based on its sheer efficacy, not to mention the convenience of use. Other MS treatments such as Copaxone are typically administered by daily injection, while Tysabri is given as a monthly infusion.

Even though Teva Pharmaceuticals is the world’s biggest player in the generic space, it is still a company which active traders follow.  This can lead to added volatility, and when the company has had a downturn in the past, shareholders have be beaten hard.  Looking for dips might be a good strategy for someone who is trying to make some short-term gains in the stock; though over the long term, it still is the darling of many on Wall Street.

Disclosure: Author’s fund is currently long TEVA as of 7/3/07, but does not own any of the other companies listed herein.

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Douglas Goldstein is the Managing Director of America Israel Investment Associates, LLC. For more information, go to www.israelnewsletter.com or call 1-888-327-6179, or email doug@profile-financial.com.

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By Aaron Katsman
www.IsraelNewsletter.com 

Mellanox Technologies, a leading supplier of semiconductor-based, high-performance, InfiniBand and Ethernet connectivity products that facilitate data transmission between servers, communications infrastructure equipment and storage systems, announced their intention to list on the Tel Aviv stock exchange. Becoming a dually listed company has one main benefit for the company. It allows local Israeli institutional investors the ability to trade in the stock, something that may be prohibited if the stock only trades in the US. This trend to dually list has produced handsome returns for investors in other companies. From Silicom(SILC) to the recent dual listing of Cellcom (CEL), leading up to and immediately after the listing in Tel Aviv, the stock usually makes a nice run in the US.

Keep in mind Mellanox went public in February, which means that they will be coming out of a lockup in early August, which could pressure the stock as insiders look to lock-in profits and take some money off the table. The company has not announced when they plan on dual listing.

Keep an eye on Mellanox as a very interesting trading opportunity.

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Disclosure:  Author does not hold positions in any of the companies listed. 

Aaron Katsman is the lead portfolio manager for the Israel Growth Portfolio and Managing Director of America Israel Investment Associates, LLC. For more information, go to www.israelnewsletter.com or call 1-888-327-6179, or email aaron@profile-financial.com.

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Douglas Goldstein,CFP
www.IsraelNewsletter.com 

The U.S. FDA is known to be slower at approving new drugs than its foreign counterparts. In the case of EPIX Pharmaceuticals, in October 2005, the European Medicines Agency granted marketing approval of Vasovist for the 25 member states of the E.U., and Bayer Schering Pharma AG, Germany, EPIX’s partner for Vasovist, began marketing Vasovist in Europe in the second quarter of 2006. With the addition of Bulgaria and Romania to the E.U. in 2007, Vasovist is now approved in all 27 member states.

Last week, on the U.S. side, the company heard positive news from the Food and Drug Administration that said they might waive the requirement for one or two more clinical trials which they had previously required. This is beginning to lead to the company getting more analyst attention; Maxim Group just initiated coverage with a target price of $10.

EPIX has developed some close ties with some of the powerhouse pharmaceutical giants including GlaxoSmithKline (GSK) Amgen (AMGN), and Bayer Schering Pharma AG (BYERF.PK), Germany, the world’s market-leading MRI pharmaceutical company. Though the FDA approval could take half a year or longer, these critical alliances should help to insure quick access to the market for Vasovist, when and if they get the government’s OK. Vasovist is an injectable intravascular contrast agent designed to provide visual imaging of the vascular system through magnetic resonance angiography.

Disclosure: Author’s fund is does not own any of the companies mentioned herein as of 7/1/07.

Please see our Disclaimer HERE.

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Douglas Goldstein is the Managing Director of America Israel Investment Associates, LLC. For more information, go to www.israelnewsletter.com or call 1-888-327-6179, or email doug@profile-financial.com.

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