The Israel Opportunity Investor was featured this week in The Jewish Week. Staff writer Tamar Snyder interviewed Aaron and me right after our launch and did a great job capturing our value proposition behind the Israel Opportunity Investor.

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Aaron Katsman
www.IsraelNewsletter.com

As IOI fans are aware, last week was my wife’s birthday. After deciding NOT to buy her jewelry, I found 2 Israeli stocks that were the perfect gift. Well wouldn’t you know today happens to be the birthday of none other than my mother in law!  While I could clearly take this post in many directions, as a good son in law, I will be well behaved and present a stock that’s worthy of being her birthday gift. Keep in mind that the name of the stock about to be mentioned should not be taken as a reflection of our relationship.

012 Smile Communications (Nasdaq: SMLC) is an interesting little Israeli communications company.  To read more about them check out the excerpt from our newsletter, as 012 Smile was a top Israeli pick from Stearman Capital’s, Zachary Scheidt.

The company is focusing on strong growth, high margin services. They have 500,000 broadband subscribers and that number is growing, and are the first company in Israel to launch nationwide Voice Over Broadband(VOB) service. The third quarter showed 39% growth in their VOB subscriber base.

As for the tradition voice aspect of the company they decided not to pursue certain hubbing opportunities due to their low margin contribution to profitability. They continue to focus on higher margin product suite to residential and business customers.

For investors looking for exposure to Israeli domestic telecom, this is an interesting company.

As for my mother in law, happy birthday and just Smile! 

Disclosure: Author’s fund has a position and is long the stock of SMLC as of 1/16/08.

Please see our Disclaimer HERE.

NEW! Introducing Israel Opportunity Investor, our monthly subscription-only newsletter. Stay ahead of the game and make smart decisions in Israel stocks. Go here to learn more.

Aaron Katsman is Managing Editor of the Israel Opportunity Investor newsletter. He is 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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Aaron Katsman
www.IsraelNewsletter.com

Zoran (ZRAN), a developer and marketer of integrated circuit cores (ICs) and embedded software for DVDs, digital cameras, and set-top boxes, is getting nailed today on the back of an analyst downgrade. A Deutsche Bank analyst cut his price target for the company down to $20. In lowering his rating on the chip industry analyst Arnab Chanda said, “While the stocks have declined dramatically in the fourth quarter and year to date, we do believe that for the vast majority of companies, the next six months is not likely to yield positive returns.”

Well, I disagree. The stock has gotten hit. Since the end of October the shares are down 38%. Now he decides to downgrade the stock? Thanks for playing.

In one of the best named posts we have had here at IOI my colleague Zack “Let’s get Jiggy” Miller has a great analysis of all that’s right with Zoran. One potential catalyst is that in February 2009, the US will turn off analog TV broadcasts, forcing the conversion to digital TV. In order to receive the new signals, the installed base of analog TVs will need to connect to an ATSC converter box. Congress has approved a coupon program such that each qualifying household will receive two $40 coupons to defray the cost of buying a converter box. Management estimates that the number of converter boxes sold ahead of the turnoff could reach 20-25 million units. Zoran typically sees a high-single digit dollar content off of these units.

At under $15 a share this looks like an interesting long-term play.

Disclosure: Author’s fund has no position in any stock mentioned as of 1/15/08.

Please see our Disclaimer HERE.

NEW! Introducing Israel Opportunity Investor, our monthly subscription-only newsletter. Stay ahead of the game and make smart decisions in Israel stocks. Go here to learn more.

Aaron Katsman is Managing Editor of the Israel Opportunity Investor newsletter. He is 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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