Three Israeli Stocks Worth a Look

 |  Includes: ELRN, ESLT, PNTR
by: Shlomo Greenberg

Michael Federmann’s Federmann Enterprises Ltd. has bought another 5.5% of Elbit Systems Ltd. (Nasdaq: ESLT) from Koor Industries Ltd. (NYSE: KOR) in a very smart move, for two reasons:

One is that Elbit Systems, in my opinion, is a Number One investment for the next decade, and I’ve said so more than once. The acquisition from Koor also severs Federmann from a partner whom I believe is only a hindrance.

In order to better understand why I’m so hot for Elbit Systems, I turn your attention to a report in Zacks on Tuesday about military electronics in the US. Zacks recommends L3 Communications Holdings Inc. (NYSE:LLL) as the best investment in the sector. I’ve told you before about this company, which is very similar to Elbit Systems. The acquisition should also make it easier for Federmann to sell part of his stake in the future if he wants, and I think he will, albeit not in the near term.

As for Koor, all I can say is that I haven’t followed the company until now, mainly because of bitter memories. After all, Koor was once a bastion of the Histadrut (General Federation of Labor in Israel), the center of Israeli Bolshevism, and I’m on the other side of that Wall.

I had an unfortunate encounter with the old Histadrut-owned Koor back in the 1980s. In any event, by the time I returned to Israel, Koor had been sold to the Bronfman group. Since I didn’t investigate the circumstances, I don’t even know how the Bolsheviks sold the company or how the Capitalists bought it. One day, maybe I’ll take a more in-depth look into the capitalist Koor. But that will be a long time ahead, because when I think about Koor, I think about the Histadrut.

• I think that Elron Electronic Industries Ltd. (Nasdaq: ELRN) president and CEO Doron Birger is a great success for the way he reinvented the company. Elron is more than an investment and holding company. It is a company that invests in technologies or in companies with proven products nd market potential, which need Elron on their side. Elron brings a dowry of managerial, marketing and other know-how.

This can be seen in developments in some of Elron’s portfolio companies. The story of Galil Medical Ltd. is progressing nicely. The company raised $48 million on Tuesday from some of the world’s best known and highly respected investors. It made a swap with General Electric Company (NYSE:GE), selling Oncura Ltd. to GE in exchange for its cryotreatment division, Galil Medical’s field.

• I must tip my hat to Pointer Telocation Systems Ltd. (Nasdaq:PNTR) chairman Yossi Ben Shalom for his success to date. It seems that there was a breakthrough in the company’s performance in January-September. The 36% rise in the share on Wednesday has almost certainly closed the gap between the company’s real value and market cap, where it is traded at a discount. I’ll henceforth closely monitor things to see whether the time has come to take this company seriously.

Published originally by Globes [online], Israel business news -
© Copyright of Globes Publisher Itonut (1983) Ltd. 2006. Republished on Seeking Alpha with full permission.