Aaron Katsman
www.IsraelNewsletter.com

Shares in networking chip vendor Marvell Technology (MRVL) are surging on the back of a very strong earnings report. As reported by Tiernan Ray: “sales rose 27% year-over-year to $804 million in its fiscal first quarter ending May 3, beating an average estimate of $784 million. The company’s net income per diluted share of 24 cents, excluding some costs, was almost five times as high as the year-earlier period, and well ahead of estimates of 13 cents per share. Including costs for stock-based-compensation, among other things, profit was 11 cents a share. The company cited stronger than expected sales of “802.11N” wireless router chips, chips for networked disk drives, and printer chips among the sources of higher-than-expected revenue in the quarter. Cost-cutting initiatives helped Marvell boost its gross profit as a percentage of sales to 52%, above the company’s 50% target.”

As colleague Zack Miller posted in December, ” It’s definitely a stock with hair on it. But after taking a recent haircut, it may be an interesting, albeit drawn-out, play.”

How right he was. Giddy Up. It seems that the company’s ambitous turnaround plan has taken hold and we are starting to see the results. Improving margins, the aforementioned launch of the 3G Blackberry, new products and cost cutting all could possibly help the stock get back on track.

As IOI wrote a few months ago, the fact that the former hi-flyer came crahsing down to earth, potentially made for an attractive entry point for the stock. I don’t want to toot our own horn, but with Miller’s Decemeber call and our February post, it’s nice to be right once in a while!

If you are a long-term investor, looking to find a battered tech name that has the potential to make a turnaround, do some research on Marvell.

Disclosure: Author’s fund holds a position in MRVL. He has no position in any other stock mentioned as of 5/30/08.

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

In a widely anticipated showdown, that garnered much media attention, Exxon Mobil (NYSE:XOM) Chairman and CEO Rex Tillerson will retain both his jobs, despite the best efforts of the Rockefeller family. The Rockefellers wanted to appoint an independent director and strip Tillerson of his chairman title. Rockefeller pressed for Exxon to invest more money into alternative energy technology, and take a longer term perspective, instead of focusing on just making large profits now.

According to the AP report: “All of Exxon Mobil’s acknowledged strengths are no guarantee it will remain flexible and visionary in light of the changing energy realities that lie ahead,” said Peter O’Neill, a great-great grandson of John D. Rockefeller. “That’s why we support our company having an independent chair. We are looking forward.” (Continue »)

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Aaron Katsman
IsraelNewsletter.com

The inflation bug has most of us worried. Recently in Israel the CPI was released and showed a 4.7% surge in prices. This is obviously not just a problem in Israel. Throughout the world, inflation, especially food inflation, is alive and well, and has been for quite some time. While at first glance investors might think that food stocks should benefit from higher prices, in practice they have performed poorly over the last few quarters. They have been unable to pass on their higher costs to consumers.
This is why today’s earnings report from G. Willi Food International (WILC), is interesting. For consumers, the earnings report signals more food price hikes coming down the road. For G. Willi, it means a return to strong growth.

Why?

Because commenting on the report, CEO Zwi Williger said, ” Furthermore first quarter’s results demonstrate that we are beginning to regain the momentum that had been building over the past few years as we have been able to successfully pass on some of our costs to our customers.”

The problem that has plagued food stocks of late is that they haven’t been able to pass on costs. The fact that G. Willi has started to do so, potentially could prove to be a big boost to their bottom line.

As for its report, the company showed strong revenue growth aided by recent acquisitions, like Shamir Salads, who produce healthy Mediterranean salads, like Hummous.

While the company refrained from providing guidance for the rest of the year, if we see a drop in the price of food materials, G. Willi could potentially benefit.

Disclosure: Author’s fund has a position in WILC. He has no position in any other stock mentioned as of 5/28/08.

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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U.S. investors have tried for the past few years to access the growth in the Israeli market without a true index vehicle for doing so. The Amidex35 is probably the most accurate vehicle for those looking to get exposure to Israel as a whole. It’s an interesting index, splitting total market cap between Tel Aviv and the U.S (around 60/40). So, you get local Israel exposure with some growth-y tech companies layered in. Kudos to Amidex’s Cliff Goldstein who shared some time with us on CNBC recently talking about Israeli companies and the market opportunity as a whole. We interviewed Cliff a couple of months ago and it’s worth reading that interview again here. (Continue »)

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