Written by: Aaron Katsman | January 24, 2008
Aaron Katsman
www.IsraelNewsletter.com
With news that Cisco(CSCO) Chairman and CEO John Chambers will be in Israel next week, thoughts turn to Radvision(RVSN) and potential salvation for investors. As we have mentioned here numerous times, Radvision and their video-conferencing technology have done nothing but disappoint investors for years. Doing much of their business with Cisco, and with Chambers known affinity with video-conferencing, investors have been waiting for the headlines to scream ” Cisco to buy Radvision.” Well John, there is no better time than the present!
After announcing an investment for $1.6 billion in the UAE last week, the least the Cisco CEO can do is spread a little financial joy in Israel, and buy Radvision.
Disclosure: Author’s has no position in any stock mentioned as of 1/24/08.
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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.
Written by: Aaron Katsman | November 23, 2007
Aaron Katsman
www.IsraelNewsletter.com
So here we go again. Just when I had pretty much thrown in the towel on Radvision(RVSN), the video-conferencing over IP and 3G networks company throws me for a loop with news of an insider stock purchase. The stock has gotten absolutely crushed this year down a whopping 40% YTD, due to a string of lower earnings guidance for the last few quarters. While the company enjoys a very close relationship with Cisco(CSCO), I am of the opinion that they have taken that relationship for granted and have lacked the focus and drive necessary to bring in other customers and grow the business.
A few days ago, the company received permission to purchase up to $30 million in stock. Skeptics among us may see that as a PR stunt to boost the stock, but in addition to the news of the company buyback, was the more interestingheadline that Yehuda Zisapel, a former Chairman of the Board of RVSN and the brother of the company’s current Chairman of the Board, bought $2 million of stock.
What to make of all this? On the one hand I can’t stand when companies talk a good game and fail to deliver. On the other hand, when the former Chairman puts in $2 million, I am intrigued. With the stock so far down, it may pay to start getting back in and slowly build a position. Of course as soon as I do, I am sure something else bad will happen, and it will start to drop again!
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Disclosure: Author has no position in any other stocks mentioned, as of 11/23/07.
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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.
Written by: Aaron Katsman | October 2, 2007
By Aaron Katsman
IsraelNewsletter.com
Radvision(RVSN), an innovator in the video-conferencing over IP, wireless and desktop markets, yesterday lowered their revenue forecast for the 3rd quarter. The stock, in turn, got squashed. In late July the company had forecasted revenues of $25 million( this was the first lowering of estimates as analysts had expected almost $27 million in revenue) and yesterday lowered expectations to $20.5 million. In Q3 ‘06 Radvision produced $23.6 million in revenues. Great! so we have have a company that keeps saying that they are in such a hot, video-conferencing, space, and they have shrinking revenues.
In a slightly bizarre comment, Boaz Raviv, Chief Executive Officer, commented: “We are disappointed by this setback in the third quarter but remain fully confident in our strategy and market position and in the growth prospects of videoconferencing in the enterprise and service provider markets.” The company added that, ” its revised third quarter outlook reflects a reduced revenue forecast for its Networking Business Unit (NBU) due to lower than expected sales both to the federal market and through its channels.”
Could it be that the company has neglected growing the business by getting new customers, and been relying too much on their relationship with Cisco(CSCO)?
About 3 weeks ago the stock was upgraded by analysts. Ouch! Since the upgrade the stock has gotten crushed, but I believe the argument that they made still holds water. The upgrade came on the heels of Tandberg ASA, a Radvision competitor, announcing that it would acquire a third video conferencing company, U.K.-based Codian Ltd., for $270 million, beating others to the punch. It was thought that Cisco was interested as well. Analysts viewed this deal as a win for Radvision as it soldifies their Cisco relationship. It’s great that the Cisco relationship is stronger than ever, but I go back to what I mentioned before. Don’t they need to try and grow business outside of Cisco? We all know the danger of having just one big customer. At $14.50 the stock looks interesting. Okay, so I said the same thing at $20, but now it’s even 25% cheaper. “Instant Rebate” Katsman can smell a good deal.
I will say that if we don’t start seeing some real growth, regardless of the Cisco relationship, I would be a seller, but let’s give it a bit more time.
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Disclosure: Author’s fund is long RVSN as of 10/2/07. Author has no positions in any other companies 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.
