Zoran (ZRAN) held an analyst day yesterday at its Sunnyvale, CA headquarters. Well attended by Wall Street, analysts generally left the event confident on the firm’s growth drivers and strategy but still very worried about the macroeconomic milieu at present.

Deutsche Bank believes in the Zoran story as it believes the firm will continue to see strong growth in digital TV and mobile phones in the second half of 2008. The bank believes ZRAN will conies to see demand driven from emerging markets with some support provided by converter box revenues. In a note to investors published yesterday, DB analysts said the leader in the consumer semiconductor market believes “that it is gaining share in printing, DVD, mobile phones, TVs, and printing.” (Continue »)

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012.Smile (SMLC): “The firm noted that revenue decline reflects a significant year-over-year decline in revenues from hubbing services and a 14% year-over-year decline in the average shekel-dollar exchange rate.” (see article here). Earnings release here. See what IOI has written about SMLC and why some asset managers think it’s cheap.

Voltaire (VOLT): Stock up over 25% this week. Company reported earnings the market liked yesterday. Revenues are up, earnings are up, and margins up a lot. Earnings release here.

Answers.com (ANSW): Stock down big this week off of earnings expectations. They didn’t look too good. Earnings release here. Answers took a $2.0M charge on terminating the Dictionary.com acquisition. Traffic was down sequentially to Answers.com while WikiAnswers seems to be chugging along nicely.

Zoran (ZRAN): IOI Portfolio Member Zoran gets an upgrade from PiperJaffray. The banking firm “predicts Zoran’s growth will bottom out in the second quarter and then rebound as consumers transition to high-definition DVD players and sales of its chips and other products climb.” See our coverage of the firm here.

Ormat (ORA): Israeli geothermal player, Ormat, sells 3M shares this week in a block trade to Lehman Brothers.

NICE (NICE): Anti-rogue trader product unveiled by Israeli security play, NICE.  NICE’s Actimize unit is a leader in employee fraud detection and trading surveillance systems at large global firms and is rumored to have detected the massive fraud at Societe Generale.  See what we wrote about NICE recently. NICE reports on May 14th.

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Stock of the Month: ZRAN

Zoran (Nasdaq: ZRAN), was January’s Stock of the Month 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

Background

Zoran develops and markets integrated circuits (ICs) that provide digital signal processing (DSP) capabilities to a variety of consumer electronic products. These products are used in DVD players, home theatre systems, and digital cameras. The company also develops products for digital video delivery via set-top box or television. The company sells through Original Equipment Manufacturers (OEM) who package them into digital and audio products sold to consumers.
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Aaron Katsman
www.IsraelNewsletter.com

Zoran (ZRAN), a developer and marketer of integrated circuit cores (ICs) and embedded software for DVDs, digital cameras, and set-top boxes, is getting nailed today on the back of an analyst downgrade. A Deutsche Bank analyst cut his price target for the company down to $20. In lowering his rating on the chip industry analyst Arnab Chanda said, “While the stocks have declined dramatically in the fourth quarter and year to date, we do believe that for the vast majority of companies, the next six months is not likely to yield positive returns.”

Well, I disagree. The stock has gotten hit. Since the end of October the shares are down 38%. Now he decides to downgrade the stock? Thanks for playing.

In one of the best named posts we have had here at IOI my colleague Zack “Let’s get Jiggy” Miller has a great analysis of all that’s right with Zoran. One potential catalyst is that in February 2009, the US will turn off analog TV broadcasts, forcing the conversion to digital TV. In order to receive the new signals, the installed base of analog TVs will need to connect to an ATSC converter box. Congress has approved a coupon program such that each qualifying household will receive two $40 coupons to defray the cost of buying a converter box. Management estimates that the number of converter boxes sold ahead of the turnoff could reach 20-25 million units. Zoran typically sees a high-single digit dollar content off of these units.

At under $15 a share this looks like an interesting long-term play.

Disclosure: Author’s fund has no position in any stock mentioned as of 1/15/08.

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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.

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