Aaron Katsman
IsraelNewsletter.com

With the 4th of July approaching, IOI would like to present a couple of Israeli stocks for your Independence day celebration. As you make the final preparations for your bar-b-que, after buying the hamburgers and the beer, you may consider doing some research and adding these 2 Israeli stocks to your shopping list.

Check Point Software Technologies (CHKP), which is the global leader in internet security, has started focusing on selling higher priced products. The company also just received an upgrade from Lehman Brothers.

According to the AP report: “Israel Hernandez said the Internet security software company is now selling higher-priced branded items and unveiling new products, and he added that demand will remain strong because security is a priority to Check Point’s customers. He said the Redwood City, Calif. company should report strong revenue growth in the next few quarters as it begins selling more appliances.”

He raised his price target to $30, which is more than 25% higher than the current price. We recently speculated as to the potential of Check Point takeover. Even Barron’s followed our lead, and wrote a similar piece. Some of our readers thought that we were spot on and some thought we were nuts. Vote here to let us know what you think.

Shares in ClickSoftware Technologies (CKSW) provider of workforce and service management software products and solutions, have been pounded over the last year.  While the company has had a couple of recent earnings misses, they still have the potential to achieve 20-25% revenue growth for ‘08, and recently reiterated their guidance. Keep in mind that this is a micro-cap stock so investors should be able to withstand the volatility associated with ClickSoftware. For investors looking for a Micro-cap turnaround story with a leading technology, you may want to do some research on ClickSoftware.

Happy 4th!

Disclosure: Author’s fund has a position in CHKP and CKSW. He has no position in any other stock mentioned as of 6/30/08.

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.

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Aaron Katsman
www.IsraelNewsletter.com

If “Initiative 97″ makes it on the ballot in the fall, citizens of Seattle will be asked to approve a measure that would prohibit the city from investing its pension funds in corporations that benefit from the Iraq war, or companies that provide material support to the Israeli government within the so-called “occupied territories.” The opposition to the initiative is being led by StandWithUs.org. It strikes me as a bit odd that a measure that seems to be intended to protest the U.S. Iraq policy also includes divestment from Israel.

Why the connection?

(Continue »)

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The entire interview with Cliff Goldstein of AMIDEX 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.

Can you tell us how AMIDEX got started?
Cliff Goldstein: I’m a lawyer by trade. In 1998 I saw some really compelling advances being made by Israeli technology companies. I decided to go to brokerage firms to see if I could find a way to invest in this ingenuity. I was specifically looking for a mutual fund that invested in Israeli companies. There wasn’t anything out there. After speaking directly to brokers, it was also clear to me that brokers themselves weren’t really knowledgeable about what was occurring on the ground in Israel. I then went to Israeli Economic Mission to the U.S. to complain about the lack of retail investment opportunities.

Why aren’t there Israeli investment products in the U.S.?
CG: I think part of the problem was that there was no benchmark for those Israeli companies trading in the U.S. There is really no comprehensive index because a significant portion of Israeli marketcap trades in the U.S. and in Tel Aviv. There were indices for the Tel Aviv Stock Exchange (TASE) but not one that included New York as well.We decided in 1999 that we could address this barrier and create our own index that included both U.S. and Tel Aviv listed Israeli companies. As this was a time before Exchange Traded Funds (ETFs) had really developed, we borrowed from the protocols developed by the WEB products. We created an index that included 60% of total Israeli marketcap. To get here, we needed 35 companies to get 60% of the total universe. Most of the companies in the initial index were Israeli companies that traded in the U.S. Given what’s transpired over the past couple of years in the U.S. and the growth of Israeli  businesses, we now see the inverse: about 60% of our firms trade in Tel Aviv and the minority in the U.S. It was these 35 companies that comprised the original AMIDEX35. We could then back test historically and when speaking to investors, this really looked good from a performance point of view. When we launched the actual fund in June of 1999, 68% of the companies traded in the U.S. and the remainder in Israel. We thought that the volatility and risk of political disruption would be highest in Israel so we were comfortable with this mix. It’s interesting to think that soon after we had the meltdown of the dot com boom. (Continue »)

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Aaron Katsman
www.IsraelNewsletter.com

Just in time for the State of Israel’s 60 birthday, IBM (IBM) continues to only buy blue and white (the colors of the Israeli flag). It looks like IBM  is set to acquire Israeli storage solutions developer Diligent Technologies Corp. for $200 million. This will be the third purchase of an Israeli start-up by IBM since the beginning of ‘08.

Back in Jan. IBM purchase storage technology company XIV for around $300-350 million, and last week it bought data recovery company FilesX Ltd. for about $70-90 million. That makes about $600 million in purchases, not bad. It reminds me of the Richard Pryor classic, “Brewster’s Millions” where, as per the Wikipedia definition “Brewster is an aging minor league baseball pitcher, with the (fictional) Hackensack Bulls. He suddenly finds that he is an inheritor of an eccentric millionaire who wanted to discourage him from spending excessively. To do so, Brewster must spend the entirety of $30 million within a strict time limit in order to inherit $300 million. There are some conditions attached: the money cannot simply be destroyed nor can he buy expensive goods and destroy them.”

As we have posted previously, IBM has stated that they plan to spend freely to buy technology companies. To date they have stuck to Israeli storage companies. IOI has speculated that a move into the security space  may make sense for IBM, and if so, Checkpoint (CHKP) may become a target.  That speculation has been met with a “when pigs fly” type of response from certain investors.  All  can say is who would have thought that we would live to see IBM as a real life Brewster!

Disclosure: Author’s fund has a position in CHKP, fund has no position in any other stock mentioned as of 4/17/08.

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.

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