Written by: Aaron Katsman | July 13, 2007
By Aaron Katsman
www.IsraelNewsletter.com
As the temperature approaches 100 degrees (it’s not global warming, it’s just what happens in the summer), here are three Israeli stocks that are sure to heat up your portfolio even more.
Commtouch (CTCH), the email defense company, has started the summer with a bang. The stock has surged 35% over the last three weeks, on the prospects of continued strong growth and Google’s (GOOG) purchase of privately held email security firm Postini for $625 million earlier in the week. Commtouch develops and provides proprietary anti-spam solutions to combat over 180 billion email messages per day, 85% of which are spam.
Comverse Technology (CMVT.pk), is a stock that I have written a lot about, mostly in terms of it fitting the bill as an attractive private equity target. Earlier this week there were media reports that the company was looking to be acquired and has hired Deutsche Bank to investigate M&A possibilities. Though the stock is up 10% on the news, I view the company being worth at least $28 in a takeover and that would be a steal (sorry Kobi Alexander, I couldn’t resist).
Retalix (RTLX), a company that automates and synchronizes retail, distribution, and supply chain operations for stores, headquarters, and warehouses, has continued to sign deals, especially in China, and recently they re-affirmed their numbers for 2007. The recent deal with HomeBuy, an operator of 60 stores in Shanghai and eastern China, and plans to open more than 400 stores in the next five years exhibit the dynamic growth of their China business. Coupled with the persistent rumors of an SAP(SAP) bid, Retalix trading under $20, looks like a really cheap buy right now and investors who have some patience may be richly rewarded.
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Disclosure: Author’s fund is long CTCH, CMVT.pk, RTLX as of 7/13/07. He doesn’t own any other positions in companies mentioned in this article.
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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 | July 10, 2007
CNNMoney story on the linkup between China’s consumer electronics group, Hisense with Israeli, Metalink (MTLK) to deliver high-definition multimedia over wireless home networks. Looks like Hisense liked Metalink’s chipset to be part of their wireless transmission of multiple high-def TV streams.
Alon USA (ALJ) buys additional pipelines in California for $4.5MM. Read our previous coverage on Alon USA.
Globes out with a story on Comverse (CMVT.PK) CEO, Andre Dahan. Globes reports that Dahan has submitted a draft strategic plan to the company’s Board enabling him to examine all strategic options. Read what IsraelNewsletter’s Aaron Katsman had to say about Comverse’s take-out prospects.
Forbes reports on Orbotech (ORBK). The maker of testing equipment used to manufacture printed-circuit-boards and flat panel displays announced yesterday that it expects a deeper-than-expected downturn in its flat panel display business.
Written by: Zack Miller | July 9, 2007
Innovator of data-capture solutions, Top Image Systems (TISA) announced today a strategic acquisition of leading EDM provider in Asia Pacific, Asiasoft. The 51% purchase of Asiasoft gives TISA an accretive acquisition that gets them to a $30MM revenue-per-year mark that the company set as a benchmark for investors earlier this year.
Interesting, if not a little too rah-rah, interview with IncrediMail’s (MAIL) founders. Interesting to hear about their marketing and M&A strategy and replete with the requisite cheerleading. “We’re now in the stages of growth and the company’s market cap does not reflect its potential at all,” insists founder, Ofer Adler.
Just in case, US managers were feeling lonely, Israel also has its share of corporate largess. The Marker has the story about outgoing Israel Corp CEO’s large parachute. That’ll buy some falafel.
UBS getting bullish on the shekel/dollar exchange.
Good read on Veraz (VRAZ) post-IPO and getting down to business. Read about the company’s take on the future of Voice Over IP (VOIP).
Written by: Zack Miller | July 8, 2007
Video services company, Optibase (OBAS), said on Friday that it began a tender offer for about 5% of the shares of Scopus Video Networks (SCOP). Following the tender (made about 6% above market price), Optibase’s would raise its stake in Scopus to almost 28%.
Israel defense contractor Elbit Systems (ESLT) announced on Thursday that a subsidiary, Tadiran, received a $85MM communications equipment contract from a European customer.
Partner Communications (PTNR) is served a lawsuit requesting certification as a class action, alleging that Israel’s second-largest mobile phone operator over-billed one million subscribers. The lawsuit, if certified as a class action, can potentially seek 1.5 billion shekels, or about $357MM.
LightReading out on the test-and-measurement sector’s unpredictability. While Radcom (RDCM) is having a disappointing 2007 (see IsraelNewsletter’s coverage on RDCM’s woes), Canadian test vendor, EXFO (EXFO) is on a roll. Its stock is up over 27% in 2007 off of beating expectations and record bookings.
Tel Aviv Court to hear Templeton-Taro case in September. Franklin Templeton (BEN) has filed a petition against the acquisition of Taro (TARO.pk) by India’s Sun Pharmaceuticals. Templeton owns a 9.5% stake in Taro and alleges that Taro’s management was pushing Taro into insolvency and trampling the rights of minority shareholders in order to sell the company.
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