After already providing preliminary results, Retalix (Nasdaq: RTLX) posted losses this morning as the maker of software for food retailers blamed a variety of issues for the swing.
Forbes reported that “the company said the fourth-quarter was hurt by wages paid in currency other than the U.S. dollar, mainly in Israel, where it is headquartered. The weaker dollar resulted in $1.4 million of additional costs.”
We’ve spoken before about the effect the strengthening shekel is having for Israeli companies reporting in dollars. Retalix’s issues stem less about the dollar than about gunning the company for further growth ahead and/or positioning the company to be taken out by a larger software concern looking to penetrate the retail food industry. We’ve even gone out on a limb and said that this could occur as early as this year.
After some corporate miscues and some issues about succession planning, we were happy to see FIMI Opportunity Funds establish a 12% position in Retalix. FIMI’s presence may compel the company to work harder at holding down costs and move more aggressively after growth opportunities.
Disclosure: Author’s fund holds a position in RTLX as of 3/19/2008
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.
Written by: Aaron Katsman | December 31, 2007
Aaron Katsman
www.IsraelNewsletter.com
With 2007 about to finish, it’s time to look forward to 2008. Here are a few of my predictions for the new year. Before I start I just want to make clear I don’t expect anyone to hold me to what I say, but of course if I actually get something right, rest assured I will let you know about it.
1- At some point during the year the price of crude oil will trade below $75 a barrel. This will be great for the consumer as they save a lot of money at the pump, and will cause a crashing of many alternative energy stocks, especially the Solar plays like First Solar(FSLR).
2- There will be no recession in the US economy, despite the best efforts of the media to “will” one. While the economy should slow somewhat during the first half of ‘08, the economy will grow enough to stay out of a recession, and the second half of ‘08 should bring back 4+% GDP growth.
3- The Rudy Giuliani/John McCain ticket will surprisingly win the US presidential election. With Republicans given virtually no chance to hang on to the White House, with a strong economy and the continued new-found success of the war in Iraq, they not only win but win back control of Congress as well.
4- Late in the summer the current Israeli government headed by PM Ehud Olmert will fall, and new elections will be called.
5- Picking up from a lackluster ‘07, with regard to M&A of Israeli publicly traded companies in the US, ‘08 will have no less than 6 major deals. Look for Gilat(GILT), Retalix(RTLX), Commtouch(CTCH), Comverse Technology(CMVT.pk), CEVA(CEVA), and Fundtech(FNDT) to be acquired.
6- The earth will cool, there will be no global warming.
7- After completing an undefeated season and winning the Super Bowl, the New England Patriots’ winning streak is snapped in week 3 of the ‘08 NFL season.
8- As much as I would like, most of these predictions will not come true.
We should all have a year of health, and happiness.
Disclosure: Author’s fund holds a position in GILT,CMVT.pk,CTCH,RTLX and FNDT. He has no position in any other stock mentioned as of 12/31/07.
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.
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.
Please see our Disclaimer HERE.
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.
Like what you see? Sign up to receive daily updates from IsraelNewsletter here
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.
