Aaron Katsman
www.IsraelNewsletter.com
As we dig out from the snowstorm that crippled Jerusalem, attention this weekend turns to sunny Arizona, and the playing of the Super Bowl. While IOI has a strict policy against choosing one team over the other, as an individual poster I will take the liberty and say that the Patriots better win, because I can’t imagine what it is going to be like to have to listen to a bunch of obnoxious New Yorkers go on and on about the Giants.
Here at IOI we would like to present our top 2 Super Bowl picks. These Israeli stocks are sure to rise enough in value that you will be able to fly to Disney World with your earnings.
Verint Systems(VRNT.pk) the security company has been on fire over the last month and a half. Previous to that it was a one way ticket downhill. The stock has gotten crushed over the last few years, mostly due to the mess that is the parent company Comverse Technology(CMVT.pk). The fact the Verint had to delay filings and get delisted from the NASDAQ has taken its toll on the stock. If you can get beyond the scandal with Comverse, you will find that Verint is growing nicely, and well undervalued to its competition, namely fellow Israeli security play Nice Systems(NICE).
Elbit Systems(ESLT) the defense company just keeps signing new deals. This past Sunday’s deal with the Netherlands, while only a $40 million deal, was much more important than the money. The company thinks that this may help them crack into NATO, and if that happens, they will start selling like crazy. With the world continuing to be a very dangerous place, Elbit Systems should benefit.
Go Pats!
Disclosure: Author’s has a position in VRNT.pk and ESLT and is long the stock as of 2/1/08.
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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.
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.
