Written by: Aaron Katsman | September 27, 2007
By Aaron Katsman
www.IsraelNewsletter.com
With Iranian President Mahmoud Ahmadinejad gaining all the headlines, in part due to his comments to destroy Israel, IsraelNewsletter.com would like to present the Iranian President with 3 Israeli stock picks, which will convince him to save the Jewish state. These stocks will keep that pompous grin on his face, as he watches them soar to heights reached only by the Israeli Air Force as they fly overhead about to bomb his nuclear program into smithereens.
Tefron (TFR) is a textile company that manufactures boutique-quality everyday seamless intimate apparel, i.e., lingerie, sold throughout the world by Victoria’s Secret (LTD). According to Wikipedia, lingerie is a term for women’s fashion undergarments. With Iran being a Homosexual-free country according to the president, and with woman enjoying tremendous freedom, it would seem ripe for a few boutiques to open. Tefron stock is trading at a 52 week low and Q2 results were awful. That being said, I think the drop has been overdone. The company is optimistic for Q4. CEO Yos Shiran said, “given our expectations for improved active-wear sales in the fourth quarter mainly due to positive indications received from Nike for increased ‘next generation’ product orders, and a seasonally stronger quarter for swimwear sales, we expect a strong improvement in sales and margins in the fourth quarter compared to the second quarter of 2007.” At around $6.20 a share, I hope to see a nice upside move by the end of the year.
Keryx Biopharmaceuticals Inc. (KERX). Ahmadinejad, in almost denying that the Holocaust ever took place, made clear his interest in scientific research. Based on this, it’s only right to include a Biopharma company. Keryx engages in the acquisition, development, and commercialization of pharmaceutical products for the treatment of diabetes and cancer. They announced a licensing agreement with Japan Tobacco worth up to $100 million in fees to give an exclusive right to develop and market its drug candidate Zerenex in Japan. The company has many products in late phase testing and we may see some blockbuster drugs coming to market in the not too distant future.
Nice Systems (NICE). With such a friendly demeanor, the name itself makes it appropriate. But there is more. You mentioned that your country was the actual victim of terror. Well then you need a top notch security company to keep you safe. Nice is a security company that specializes in two markets: Security and Call Centers. Its security solution empowers security personnel to detect, prevent, and respond to threats in real-time. It also allows them to investigate, and reconstruct criminal and security cases using video surveillance and control services, incident monitoring, and reconstruction solutions. The company has continued to achieve strong growth quarter after quarter. The company raised guidance last month, and we expect a very strong Q4.
President Ahmadinejad, these Israeli companies should keep you grinning from ear to ear.
Please see our Disclaimer HERE.
Disclosure: Author’s fund is long TFR and NICE as of 9/25/07. Author holds no positions in any other companies mentioned.
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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.
Written by: Aaron Katsman | September 25, 2007
By Aaron Katsman
www.IsraelNewsletter.com
In the midst of the Jewish New Year and 3 week long holiday season, food has been playing an essential part in my life. Since I can’t get food out of my mind, I decided to revisit an Israeli food company that has been recently sporting a stock price which has been doing nothing but falling. G. Willi-Food(WILC), one of Israel’s fastest growing food companies and IsraelNewsletter favorite, has been in a freefall of late and yesterday saw a closing price of $5.61. The stock is currently trading at around 18.5 times earnings and with a PEG of 0.85, the stock looks very cheap compared to competitors.
Willi Food continues to execute their business model, and drive their expansion into the US kosher food market. As I have mentioned in the past, the kosher food market is very large and growing rapidly. Look for WILC to continue to profit from this trend for years to come.
In late August the company reduced estimates, but still expects to show revenue growth of between 30-40%. This is still very strong growth and I think the stock has been unfairly punished, and trading in the $5.50-$6.00 makes for an intriguing long-term investment.
Sorry to cut this short but I need to eat. Happy holidays.
Please see our Disclaimer HERE.
Disclosure: Author’s fund is long WILC as of 9/25/07.
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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.
Written by: Zack Miller | September 20, 2007
Zack Miller
IsraelNewsletter.com
In light of the shocking event caught on camera at the University of Florida last week (sorry, but go Hurricanes!) in which a student disrupting a John Kerry stump speech got “tasered”, we’ve been hearing, reading, and viewing a lot of stuff surrounding the use of both excessive force (or not, depending how you view the situation) and the use of the Taser gun — developed and marketed by the Taser International (TASR).
[youtube=http://www.youtube.com/watch?v=AkMkGOpAF4s]
I’ll leave the analysis of the event to the New York Times , to Wired, and to The Washington Post as what to make of the incident but I thought it would be interesting to drill down on Taser’s stock after the company has received so much attention.
I remember trading (or trying to trade the stock) back when I was a hedge fund analyst in 2003. There was all sorts of positive news on the stock and what we felt to be the short squeeze to end all short squeezes. The stock rocketed up over 2000% in that year and was up another 300% in 2004. Needless to say, the small cap TASR found its way onto many institutional and retail radar screens.
TASER International develops “electronic control devices” designed for use in law enforcement, corrections and personal defense. Taser makes both a product designed for law enforcement market as well as a consumer version. The Taser products are capable of subduing an opponent by skin conduction (you actually touch it to the skin/clothing and zap) or by shooting connected probes out onto a suspect and shocking him remotely. Cool stuff and in the wake of a lot of police fatalities, local law enforcement agencies flocked to it.
TASR has seem a steep growth curve in its revenues growing 180% from 2003 to 2004. Revs have been erratic since and 2006 saw the same levels as 2004 and with a serious decline in profitability. TASR reported strong 2Q07 earnings of $.06 — in-line with consensus and off of revenuews of $26 million. TASR saw $5M in international sales which appear to have accelerated.
Jeffries and Co. , who covers the stock, expects a long-term growth rate of 40%, citing Taser’s new C2 product as expanding both domestic and international volume. There are numerous large law enforcement and consumer market opportunities out there for Taser. Jeffries thinks that TASR should be able to expand operating margins to the mid 30% range and ROIC to 50% — both pretty juicy.
For TASR to reach these goals, a lot is built-in to the Taser story. Namely,
- 25% of gun owners buy a Taser over the next 10 years
- about 20% of global law enforcement carries a Taser within 10 years
Military opportunities and new product sales are not included in Jeffries growth assumptions.
On an valuation basis, this thing is really rich when you look at its P/E — trading at 82X this year’s estimated earnings and 43x Jeffries’ estimated earnings in 2008. Too rich for me but if the revenue/earnings growth numbers are right or there’s upside with military sales, this thing gets more interesting.
Stories like “Don’t Tase Me Bro” provide a double-edge sword for the company. While police will continue to use excessive force, the idea is that Taser cuts down the ultimate number of “death-by-cop”s globally. That may be the ultimate payoff for Taser.
Disclosure: Author’s fund does not have a position in TASR although I’m contemplating buying one for all the cops in my life.
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Zack Miller is the lead equity analyst for America Israel Investment Associates, LLC. and a former equity analyst for a leading multinational hedge fund. For more information, go to www.israelnewsletter.com or call 1-888-327-6179, or email
Written by: Aaron Katsman | September 19, 2007
By Aaron Katsman
IsraelNewsletter.com
Jacada(JCDA), a leading provider of unified desktop and process optimization solutions for customer service operations, yesterday annouced the signing of another deal with a public utility, worth to be an estimated $1 million in revenue. This is great news for Jacada. Jacada continues to sign deals. This is the 4th utility to do a deal with Jacada recently, and add to it the deal with Harrah’s(HET), and Jacada seems to be executing their business model to perfection.
With a market cap of about $73 million, and almost $36 million in cash, Jacada is still flying under Wall Street’s radar, but high profile deals will surely help in getting the company discovered and that should energize the stock price.
Please see our Disclaimer HERE.
Disclosure: Author’s fund is long JCDA as of 9/19/07. Author has no positions in any other companies mentioned.
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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.
