Not wanting to be remiss in giving an update on Israel Opportunity Investor portfolio member, Alvarion (Nasdaq: ALVR), we want to chime in with our two cents. We’ve been positive on the stock and have seen our thesis — that of further global uptake of fixed mobile services — came to fruition and even surpass what we were expecting. This is a critical lesson for investors: while stocks may perform financially as planned, how they trade is another matter.

We’ve seen the stock essentially pulverized by fear of weak global markets. Telecom spending typically gets pushed out during turbulent times.

That said, Alvarion’s not seeing that yet. In fact, while we continue to think the stock has a lot going for it, we are sensing a rising sense of negativity on the stock, driving it down off of what was ultimately a good reporting season and not too bad guidance in the headwinds of a weak dollar.

An article ran in SmallCapInvestor last week after Alvarion announced earnings and looked at how analysts were sizing up ALVR’s results. The way I read the results and how Susquehanna addressed them?

• Alvarion had a Q4 ahead of estimates and saw WiMAX revenues up over 50% from 2006.
• Higher operating expenses are certainly a negative for the company but the company attributed this to a weak US dollar.

What many investors and even analysts don’t appreciate is that the dollar has fallen like a rock versus the Israeli shekel. Israeli firms like Alvarion that trade in the US and are priced in dollars but conduct R&D/production in Israel are all feeling a squeeze. We’ve heard this from numerous Israeli CEOs. When the time comes that the dollar ultimately strengthens against the shekel, we’ll see a natural reversal in these numbers. My point here is that when numbers like this are clearly attributed to fluctuations in the dollar, earnings gains/misses are not organic changes in the business model.

This same analyst report that SmallCapInvestor disparaged actually comes out pretty positive on Alvarion. Susquehanna likes the Q4 surprise, likes the WiMAX opportunity, and Alvarion’s stable of international customers. Long term investors in Israeli stocks trading in the US will find it somewhat funny to think that a particularly strong shekel is weighing on earnings.

Disclosure: Author’s fund holds a position in ALVR and is long the stock as of 2/8/08.

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ClickSoftware (Nasdaq: CKSW) announced disappointing quarterly earnings yesterday. The company’s EPS and revenues were below what we and the rest of the Street were expecting. We think expectations got a little bit ahead of themselves. While we’re disappointed, the company is continuing to perform and still expects 20-25% revenue growth in 2008. The backlog was strong, over $25 million at the end of 2007.

We think the miss was due to slipped closings of a couple deals that we believe the company ultimately will close in subsequent quarters. At current valuations and subtracting the cash, the company is trading almost at trailing revenues. Check out why we like the firm’s workforce management and service optimization.

We’re sticking with CKSW and would be buyers here.

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We recently got a chance to sit down with Jon Medved, a rock-star in the Israeli tech world, to discuss his new startup. This interview appeared as 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

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Jon, can you tell us what Vringo’s all about?
Jon Medved: It’s not just a company story; it’s a story about trends. The trend is personalization 2.0. The big bonanza which most investors missed, myself included, was ringtones. If you were pitching VCs a ringtone company in 1999,you wouldn’t have even been able to get a meeting. You would have been shooed out. The ringtone business has been a goldmine for those investors who got it. Now, it’s a $6 billion business worldwide. It’s becoming a major source of revenue for the music labels. Take Universal Music Group, for example. Music star, Akon, recently sold a batch of 11 million ringtones. And unlike iTunes, which sells songs for $.99, these ringtones go for $2.

It’s the drive for human expression to want to stand out in a crowd, to personalize things, to make them mine. Just like Jibbetz does for Crocs shoes, allowing you essentially to pimp your shoes, like wearing a T-shirt with a slogan on it, or slapping a bumper sticker on your car — Vringo is doing the same thing for the phone. (Continue »)

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The entire interview with Pointer Telocation’s Chairman, Yossi Ben Shalom, 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

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Hi, Yossi. Can you tell us about your company?
Yossi Ben Shalom, Chairman: Pointer Telocation (Nasdaq: PNTR) develops and supplies location based technologies and provides numerous value-added services to car dealers, auto manufacturers, insurance companies, and fleet managers, including road-side assistance, vehicle towing, stolen vehicle retrieval, and fleet management.

We accomplish this through 3 major sets of technologies:

1. Radio Frequency (RF) systems: these are technologies that communicate and locate an automobile. It’s basic technology that was invented around WWII but we’ve developed it into a low cost system, consisting of bay stations and network management tools. With all of our experience we have created a complete system, and it would be complicated and expensive for someone to come along and try to duplicate our system.

2. Cellular units: We’ve combined GPS and GPRS together in a box with embedded software. We’ve developed our technology with a high sensitivity to both power and air time consumption. We have more than 100,000 units that we’ve sold into the automotive aftermarket, making us a serious player. We have developed an expertise through our experience with different customers, different demands, and working across numerous countries.

3. Command and Control: we’ve invested heavily in developing a very sophisticated system used for fleet management and stolen vehicle recovery (SVR). We can sell our products to car owners, insurance companies, dealers, auto manufacturers, and even to the authorities.

We feel that the market for our products is not yet mature, so we need to offer services to promote consumer uptake. Having our own technology allows us to win new markets for our services. Our main competitors, Lo-Jack (Nasdaq: LOJN) and Ituran (Nasdaq: ITRN), both have similar models.

What’s the difference between Pointer and a company we are more familiar with, AAA?
YBS: First of all, AAA is a US-based service and in 2007, we’ve done no business in the U.S. (Continue »)

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