Before we get to the Israel news briefs, I want to send a big congrats out to Seattle Mariners announcer Dave Niehaus, on his induction, yesterday, to the Baseball Hall of Fame. My childhood was spent listening to him do play-by-play and nobody does it better. His “Fly away”, “My o My”, and ” A very pleasant good afternoon everybody on a glorious day out for baseball, the mountain is out in all her majesty” are calls that will forever be ingrained in my memory as well as millions of baseball fans who have listened to him over the years.
Now to the news:
Elbit Systems(ESLT) looks like it will have a strong quarter. Globes reports that the company is looking to make between $8-11 million more than they had thought as short-term delivery contracts rose.
Did I mention that today is my birthday?
The Jpost is reporting that Israeli chip maker Metalink (MTLK) is about to cut a lot of jobs as they try and reduce their burn rate. The report also says that the company is reviewing ’strategic alternatives’ which sounds like a potential sale maybe in the works.
Over at Seeking Alpha, Pierre Daillie interviews well respected investor Larry Sarbit, who speaks highly of the Israeli company Ituran (ITRN). Commenting on the the company that provides location sensing devices, Sarbit says, “It’s a cash machine. Once you get this thing in the car, it just spills out cash and they probably got pricing built into this. In other words, if they increase the price of monitoring by a buck a year, do you think a guy who can afford a Mercedes in Argentina is going to give a damn?”
Silicom (SILC) is out with earnings and they say that they were impacted both by a drop in the Shekel/USD exchange rate as well as a tough spending environment for their customers. CEO Shaike Orbach said, “On the one hand, our revenues for the quarter suffered from both the difficult market environment, which has affected the revenues of many players in the network appliance value chain, and from a significant reduction in orders from our largest customer. We have been impacted by the customer’s new appliance configurations, which reflect its decision to begin offering our copper BYPASS cards as an optional add-on rather than as a standard component, as well as by its low quarterly volume of orders for fiber cards.“
Aaron Katsman, IsraelNewsletter.com
Disclosure: Author’s fund has a position in ESLT,ITRN,SILC. He has no position in any other stock mentioned as of 7/28/08.
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.
Aaron Katsman
IsraelNewsletter.com
The Israeli business daily Globes is reporting that Boeing (BA) has selected a training system made by the Israeli defense contractor Elbit Sysytems (ESLT), to be used in US Navy training.
According to Globes: ” Boeing Co. has selected Elbit Systems Ltd. as the supplier for the US Navy’s T-45 Goshawk Virtual Mission Training System (VMTS)…..The T-45 will replace aging T-39s as a key element in the US Navy’s Undergraduate Military Flight Officer (UMFO) training modernization plan. The T-45 will provide realistic training at a lower cost in a fighter-like environment.”
Elbit Systems has been an IOI favorite for quite some time. The company has continued to sign deal after deal and has a pipeline of almost $5 billion. While the size of the deal wasn’t disclosed, this type of high profile deal is great not only for the company but for shareholders as well. While Elbit has done a phenomenal job of growing the business and creating profits for shareholders, the company still remains under the ‘radar screen’ of many investors. This type of high profile deal involving Boeing and the US Navy, is the kind of deal that can put the spotlight on the company, and create general knowledge to the greater investment community.
This deal could be problematic for those in Seattle (read our post on the issue) that are pushing the city to divest from Israel. A hi-profile Seattle employer that enters into a defense deal with an Israeli company, to help train US Navy fighters. It can’t get worse than that.
Disclosure: Author’s fund has a position in ESLT. He has no position in any other stock mentioned as of 7/02/08.
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.
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 »)
Aaron Katsman
www.IsraelNewsletter.com
Elbit Systems (ESLT), one of our favorite Israeli stocks that trades in the U.S., blew past earnings estimates and produced another record quarter. The Israeli defense company, posted revenues of $616.1 million, up from $403.6 million in the first quarter of 2007.
Gross profit for Q1 ‘08 increased by 62.6% to $168.4 million (27.3% of revenues), as compared with gross profit of $103.5 million (25.7% of revenues) in Q1 ’07. Margins continued to be strong and the company now can boast that more than 80% of revenues come from outside of Israel, meaning that they have done a bang up job in diversifying their revenue stream.
What really makes the report interesting is the backlog of orders in the pipeline. Elbit reports $4.9 billion in backlog, with about 69% of the Company’s backlog as of March 31, 2008, scheduled to be performed during the upcoming three quarters of 2008 and during 2009. Giddy up! Obviously this bodes very well for the upcoming year, and has the potential to help fuel the stock higher.
Commenting on the earnings, CEO Joseph Ackerman said, “I am pleased to report another quarter of strong growth with record financial results. We also had a record quarter of over $914 million in bookings, enabling our backlog to reach just shy of the $5 billion milestone. (Continue »)
