Aaron Katsman
IsraelNewsletter.com
The Israel financial daily Globes is reporting that email animation company Incredimail (MAIL) wants to reprice options for 5 senior managers. The company which works in the space of email animation, clearly has a problem distinguishing between reality and fiction. The stock is down more than 40% YTD, there was a management shakeup, issues with Google (GOOG), and senior management wants to reprice their options? I don’t know, are they planning to sell the company for some kind of premium and attempt to make a boatload of money on the transaction, while all investors will see is a slightly lower tax loss?
According to the article: “The options are held by Incredimail CEO and director Ofer Adler, who is the company’s largest shareholder, president Yaron Adler, the company’s second-largest shareholder, chairwoman Tamar Gottlieb, and directors Yair Zadik and Gittit Guberman.”
I would understand if the company wanted to reprice employee stock options (ESOP) as they would want to retain their employees, but senior management? My hunch is that most investors wouldn’t mind if senior management was let go. Why should these executives profit when investors have seen tremendous losses? Why should 2 directors and the chairwoman get their options repriced? (Continue »)
Written by: Aaron Katsman | February 25, 2008
Aaron Katsman
www.IsraelNewsletter.com
Shares of Marvell Technology (MRVL) are trading higher as a story in Barron’s says that shares could double in two years as the company’s chips find their way into new products and help boost profits. Barron’s thinks that a potential catalyst for the stock will be as Research in Motion (RIMM) launches 3G BlackBerry handsets using Marvell chips.
Marvell, a fallen tech-darling, has dropped over 60% since early ‘06. Beset by problems from the options backdating scandal and falling margins, investors have totally lost confidence in the name. More than once over the last 12 months we have heard that the stock is a great buy, only to watch it fall more.
While some investors will cry that now that Barron’s wrote about them the stock is doomed, the potential for the stock to recover is very real. Improving margins, the aforementioned launch of the 3G Blackberry, new products and cost cutting all could possibly help the stock get back on track.
Some buy-side investors are betting that Marvell can earn $1.00 to $1.50 if it executes well in the fiscal year ended January 2010 (again, not counting options). Sangeeth Peruri, of J&W Seligman, thinks such earnings would return the forward-earnings multiple on the stock from today’s 16 times earnings back to the level of over 20 times that Marvell enjoyed in years past. If so, Marvell’s shares could more than double from 11 today.
“Revenues are growing, driven by a lot of product cycles,” says Peruri. “You could get 30-50% annual earnings growth for the next three-to-five years.”
Disclosure: Author’s fund holds a position in MRVL. He has no position in any other stock mentioned as of 2/25/08.
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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.
