Aaron Katsman
www.IsraelNewsletter.com

Tomorrow is my daughter’s 7th birthday, so as is customary here at IOI, I will highlight a birthday stock to use as a gift for her. I must note that my wife has been racking her brains as to what present we should get, and she, not surprisingly, did a great job of getting a gift that we think our 7 year old will love. For full disclosure, my contribution consisted of a few grunts, when my wife asked my opinion of certain possibilities.

Because she is turning 7, why not look at a stock that is trading in that range. Well for starters we have Orckit Communications(ORCT). They develop telecommunication equipment that enables transmission of broadband services. They are a classic old-school Israeli company that has cutting edge technology, but virtually no one to buy it. They have one real customer, KDDI in Japan, and we have been hearing for a few years now about another customer that is about to make a purchase. Unfortunately, outside of a small deal with Deutsche Telecom(DT), where we have yet to see much in the way of revenue, it’s the same story quarter after quarter. Orckit may be a good stock to get my mother in law for mother’s day, but doesn’t make the grade for my oldest child.

The stock that we will purchase for her is Ulticom(ULCM.pk). They provide service essential signaling solutions for wireless, wireline, and Internet communications. One of our favorites, Comverse Technology(CMVT.pk) owns a huge stake in the company, and as we have written, we are looking for Comverse to try and sell off Ulticom. Comverse is trying to strealine their business, and create shareholder value. Hopefully, a sale of Ulticom should fetch a nice premium.

Happy birthday sweety, and I hope that you are blessed with a year filled with health and happiness. 

Disclosure: Author’s fund has a position in CMVT.pk and ULCM.pk. He has no position in any other stock mentioned as of 5/9/08.

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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

With newspapers, TV and radio full of all kinds of Labor Day sales, I thought that it would be a good idea for IsraelNewsletter shoppers to get a heads-up on 3 Israeli stocks selling at discounts that even my wife, Yael, would appreciate.

Can you say 30% off?!

While we are on the topic of my wife and shopping, I would like to say publicly that she did a great job buying new school clothes for my oldest daughter — clothes that my daughter likes (no easy feat) and she did it at a cost that I like (an equally difficult task).

Our first special is an IsraelNewsletter favorite, Comverse Technology (CMVT.PK). In fact, earlier in the day, I was speaking with a well-known analyst who follows the Israeli market and he agreed that his top pick now is Comverse. The stock has continued to get smashed and is 32% off it’s 52 week high. It makes sense that the continued drop is a result of the current market climate regarding how M&A deals are going to get done and many investors who figured Comverse to be “in play” are now worried that a deal won’t get done. Regardless of the M&A angle, the stock is now trading with a market cap of $3.3 billion, and let’s not forget that they still have $1.8 billion in cash, plus the value of their holdings in Verint Systems (VRNT.PK), and Ulticom (ULCM.PK). The stock looks really cheap at these levels and my hunch is that buyers today will be able to fund next years labor day BBQ with their gains.

In Aisle 2 we have Mellanox Technologies(MLNX), a leading supplier of semiconductor-based, high-performance, InfiniBand and Ethernet connectivity products that facilitate data transmission between servers, communications infrastructure equipment and storage systems, who recently had their shares listed on the Tel-Aviv Stock Exchange as well. I mentioned in early July that this would be an interesting trading opportunity. In fact leading up to and shortly after the dual listing, the stock moved up, and then over the last 2 weeks it has come way down as insiders have been selling their shares after the initial IPO lock-up expired. The shares are down over 30% in the last month, but the fundamentals of the company haven’t changed. They have produced 4 consecutive quarters of revenue growth and that trend should continue. I suspect that most of the insiders are done selling and we will see the stock start moving back up.

The last pick is Orckit Communications (ORCT), a leading provider of advanced telecom equipment targeting high capacity broadband services. Why you ask? I know they are losing money, only have 1 real client and keep pushing back announcing when they will add another big client. The reason is that I do believe that at some point they will announce a big deal or two and also I wont be surprised if their big Japanese customer KDDI decides to expand their relationship. They have about $5 a share in cash, and the stock is down 50% from it’s 52 week high. For all you traders out there, the stock has done very well during the 4th quarter over the last 3 years, and with it trading so low, this may be the 4th year of success.

Enjoy your long weekend!

Please see our Disclaimer HERE.

Disclosure: Author has a position in CMVT.pk, VRNT.pk, ULCM.pk as of 8/29/07. Author has no holdings in any other stock mentioned.

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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.

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Are we having fun yet?  Tough trading out there but Israeli companies continue to make news.

Answers (ANSW) getting nailed after predicting further widening losses next quarter.

Orckit (ORCT) wins $12 million in damages from Conexant (CNXT) covering damages incurred in the period from 2001 through 2003 from a supplier of semiconductor chips that was acquired by Conexant. The semiconductor chips were used in Orckit’s legacy DSL products.

Remember Backweb Technologies (BWEBF.OB)? They reported yesterday.

Internet Gold (IGLD) reports earnings.

The Street liked Cellcom’s (CEL) earnings report. See our recent coverage of Cellcom and the issues they face given Israel’s 120% cellular penetration.

Zoran (ZRAN), the maker of software and chips for digital media products, rose off an article in Barron’s. In the article, a Jefferies & Co. analyst said the stock may jump 50% in the coming year.

Still on the lam, Comverse’s (CMVT.PK) founder and previous CEO, Kobi Alexander still eludes extradition from Namibia to the U.S. for his connection in an alleged options backdating scheme. See why IsraelNewsletter may not agree with all the politicking going on but we do like the stock. Click here to read our previous coverage on Comverse.

Ness Technologies (NSTC) buying Italian software house, Selesta SpA.

Ormat Technologies (ORA) picks up an RBC upgrade to outperform.

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