The entire interview with Pointer Telocation’s Chairman, Yossi Ben Shalom, is 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, Yossi. Can you tell us about your company?
Yossi Ben Shalom, Chairman: Pointer Telocation (Nasdaq: PNTR) develops and supplies location based technologies and provides numerous value-added services to car dealers, auto manufacturers, insurance companies, and fleet managers, including road-side assistance, vehicle towing, stolen vehicle retrieval, and fleet management.

We accomplish this through 3 major sets of technologies:

1. Radio Frequency (RF) systems: these are technologies that communicate and locate an automobile. It’s basic technology that was invented around WWII but we’ve developed it into a low cost system, consisting of bay stations and network management tools. With all of our experience we have created a complete system, and it would be complicated and expensive for someone to come along and try to duplicate our system.

2. Cellular units: We’ve combined GPS and GPRS together in a box with embedded software. We’ve developed our technology with a high sensitivity to both power and air time consumption. We have more than 100,000 units that we’ve sold into the automotive aftermarket, making us a serious player. We have developed an expertise through our experience with different customers, different demands, and working across numerous countries.

3. Command and Control: we’ve invested heavily in developing a very sophisticated system used for fleet management and stolen vehicle recovery (SVR). We can sell our products to car owners, insurance companies, dealers, auto manufacturers, and even to the authorities.

We feel that the market for our products is not yet mature, so we need to offer services to promote consumer uptake. Having our own technology allows us to win new markets for our services. Our main competitors, Lo-Jack (Nasdaq: LOJN) and Ituran (Nasdaq: ITRN), both have similar models.

What’s the difference between Pointer and a company we are more familiar with, AAA?
YBS: First of all, AAA is a US-based service and in 2007, we’ve done no business in the U.S. (Continue »)

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Can you tell us a bit about your firm?

Jack Gecovich: LanderNorth Asset Management, LLC is a Registered Investment Advisor founded in 2003 and based in Beachwood (suburb of Cleveland), Ohio. The firm offers a small cap separate account strategy to Institutions, Trusts, Foundations, Endowments, and High Net Worth Clients.

LanderNorth differentiates itself from other small cap managers in that the investment team has extensive private equity experience. LanderNorth applies private equity-like due diligence to small public companies that are substantially overlooked and undervalued by institutional investors. The investment team works in tandem with a private equity growth buy-out firm and applies private equity due diligence to publicly traded companies. The principals of the firm have over seventy-five years of collective asset management experience and rely on a combination of external and internal research in the construction of client portfolios.

The Strategy benefits from its investment team’s proven track record in both small cap public stock investing and private equity investing. The team follows a GARP (growth at a reasonable price) philosophy and looks for solid, fundamentally sound growth companies that are trading at reasonable valuation levels.

How does a firm located in Beachwood, OH, come to start investing in Israeli companies?

JG: Here in Beachwood, Ohio we benefit from our local government recognizing the vitality of Israel’s economy and Israeli innovation. In an effort to attract Israeli companies and have them consider Beachwood as their US based operation, the city has taken a number of steps in making Beachwood a real option, including offering assistance for office locations and recruiting services for professional & support staff. The state of Ohio has also revised their tax code to make it easier for small companies to set up shop.
As a result, LanderNorth has had the fortune of meeting with a number of Israel based companies. Meeting with these companies helps us understand the landscape in Israel and what the real opportunities are here in the U.S. for Israeli based companies. Utilizing our private equity experience we are able to recognize what it takes for a small company to grow and make a presence here in the U.S.

One of the themes of our small cap strategy is to find undervalued companies that are not only growing in their local economy, but are able to create a world wide market share for their product or service. Finding opportunities in Israel is a great example – not only is their local economy healthy but the companies we look at are expanding their market presence overseas.

Can you tell us about some of your Israeli holdings?

JG: BluePhoenix (Nasdaq: BPHX), an Israeli based IT company is one of our largest holdings today. We initially discovered this story back in November 2006 when the CEO of the company Arik Kilman visited our offices here in Beachwood. BluePhoenix provides solutions for IT modernization, primarily helping companies move off pre-relational mainframe databases to relational databases (IBM DB2, Microsoft SQL Server, Oracle). The US market alone represents around three thousand potential clients and the value of the market is estimated at $9 billion by 2009. Some sample clients include Merrill Lynch (financial), AFLAC (insurance), Ford (automotive), and the Illinois Secretary of State (government).

The stock has had quite a run. Are you planning to keep holding it?

JG: BluePhoenix has gained more than 200% since late 2006. We believe that this company is still just being discovered and the market potential remains attractive. We have a well defined sell discipline that includes maintaining price targets and keeping a close eye on fundamentals. Neither of these aspects of our sell discipline are currently at risk and we continue to remain very positive on the name.

What else do you hold?

JG: Another Israel based company that was recently presented to our investment committee was RRSat Global Communications Network (Nasdaq: RRST). They provide global, comprehensive content management and distribution services to television and radio broadcasting industries. Here is another great example of a proven business model that is working well in Israel and they are looking to bring their expertise and technology to the U.S. to capture market share. RRSat currently offers high-quality and flexible global distribution services for content providers including 295 TV shows and 80 radio stations worldwide. Given their unique elevated geographic location in southern Israel, RRSat is able to offer this service cheaper than competitors. They are looking for a US based partner and should have that in place by the beginning of 2008. A few of their major customers include Fox News, NBC News, CBS, NTV Russia, Turkish Radio & TV, etc.

Is there a big market for this in the US?

JG: The market potential in the U.S. is large and growing as most of the larger media companies want to outsource this type of activity. Another catalyst for growth is the US mandate that will require all analog TV broadcasts to be replaced with high definition TV by 2009. Not only will this create a new opportunity for RRSat, but this also creates a cross sell opportunity to existing customers.

Are there any companies that you are considering taking a position in?

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