Cimatron (CIMT) was February’s Stock of the Month as part of our new subscription newsletter, Israel Opportunity Investor. You can find out more about the product and the opportunities we cover at www.israelnewsletter.com

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Hi Dan, can you tell us what Cimatron does?
Dan Haran, CEO: Cimatron (Nasdaq: CIMT) is in the CAD-CAM arena for manufacturing. When companies manufacture things, they still need a lot of CAD-CAM or Numeric Control (NC). When people have to machine anything (milling, turning, etc.), this all needs to be computer driven.

What do you do for plastic manufacturing?
DH: With plastic-injection molds, it’s quite complex to make the mold. It’s not just two pieces of metal with a cavity. Manufacturers need to inject plastic, cool it, eject the part – the machine to do this is quite a complex machine. Molds have up to 5,000 parts (pins, screws, plates). To design these machines, it’s a very complex design task. Typically, one person designs the product, but another person (usually in another company) designs the molds for each part. Having good software is essential to managing this process. (Continue »)

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It’s been a wild and woolly week for stocks in general and even more so for Israeli companies. We’ve seen some disappointing earnings across a broad swath of stocks and even the mighty have felt some pressure.

Let’s start with Alvarion (ALVR). Even after the Cisco purchase of WiMax competitor, Navini, the stock has had a hard go of it and even received a downgrade by Merriman, Curhan, et al. IsraelNewsletter’s Katsman, though, is still very positive on the name. Read his recent post here. Before Cisco (CSCO) officially announced its takeover of Navini, I posited that it would be better served by buying ALVR. Read that article here.

Commtouch (CTCH) out with numbers.

Radvision (RVSN) stinks up the joint. Even my colleague, Aaron “Buy Everything” Katsman has lost faith in the firm. See his recent capitulation here.

Magal (MAGS) Systems gets an order.

RRSat (RRST) reported last week.

Partner (PTNR) sees a lift from rising revenues.

Answers.com (ANSW) reports really strong traffic growth in its new WikiAnswers product.

Laggard BigBand Networks (BBND) terminates its CMTS business. I wrote on BloggingStocks about the future of cable TV and how BBND plays into the thesis.

ClickSoftware (CKSW) traded down big after reporting OK earnings. Read why Katsman smells an opportunity in this name.

Microcap Cimatron (CIMT) out with earnings and some info about its plans for China.  Read some excerpts from the conference call.

012 Smile.Communications (SMLC) floated this week.  I posted on the offering here.

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Zack Miller
IsraelNewsletter.com

As we’ve said repeatedly, Israel has a stable of really interesting microcap/smallcap companies trading under most investors’ radars. Cimatron (CIMT) is one of these plays worth a look.

Sporting a micro-cap of less than $25M, Cimatron provides investors with a profitable microcap with cash on the books, poised to see some nice growth in the future. CIMT competes in the competitive CAD/CAM space for the tooling and manufacturing vertical. As much of manufacturing is pushed offshore, Cimatron continues to see nice growth from foreign markets — so much so, that they’ve purchase two tranches of their Italian distributor, Microsystem, with a call option to purchase the remaining shares.

Cimatron was up almost 15% yesterday (and over 125% on the year) off of the strength of their conference call, held in China.

I thought it’d be useful to highlight some points from the conference call that got the market excited.

• Microsystem had $10.5M in revenue in 2006 and poised to continue to grow profitably. Looks like earnings will become accretive in Q32007.
• Launch of Cimatron 8.0 appears to be really interesting for the company, as it positions them in a new market, the die design market. The company expects organic growth from this new target market in the quarters ahead.
• In terms of geographical sales, CIMT sells 57% in Europe, 23% in the Asia Pacific, 12% in North America and 8% in the rest of the world.
• The company said that they are focused on increasing shareholder value. Look for some more M&A in the future.

Interesting little play deserving doing the work.

Disclosure: Author’s fund has no position in any stock mentioned as of 10/28/2007.

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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 zack@profile-financial.com

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