Why Ceragon and Radvision Have Room to Grow

Ceragon Networks Ltd. (CRNT), which reported on Monday, received a boost last Friday, when First Albany Inc. reiterated its "Strong Buy" recommendation for the company and upped its target price to $16 from $13. Having climbed 147% since the beginning of the year, some people will no doubt be selling their shares, regardless of the company's second quarter results.

I, on the other hand, think that Ceragon could still climb even further since the inflow of investment into its particular field, wireless networks, and in the markets it operates in such as India or even the US, is so large that I don't see any slowdown in the offing. It is possible, for example, that Ceragon, not Alvarion Ltd. (ALVR), will be the big Israeli winner of Sprint Nextel Corp's (S) mega WiMAX project, since the company partnering with Sprint in its roll-out, Clearwire Corp. (CLWR), is, I believe, a customer of Ceragon.

Another Israeli stock in my portfolio which reported yesterday is Radvision Ltd. (RVSN). Like Ceragon, it is also is a member of the Zisapel brothers' family of companies, and it too is one of the best in their group. The stock has now lost the powerful momentum it enjoyed last year, a momentum that was set in motion by a recommendation from Wall Street guru James Cramer, when he disclosed that Radvision was participating in a massive control and monitoring project that Cisco Systems Inc. (CSCO) is executing for US forces in Iraq.

Radvision has delivered a zero return since the beginning of year, a performance which is due, among other things, to the fact that its managers announced in their guidance for the first quarter that R&D expenditure would be much higher in the latter part of the year. Should the company not repeat its surprisingly low guidance from the previous quarter, there is a chance that the current apprehension in the market will disappear permanently, and we'll see the stock powering northward beyond its 2006 high of $25.

Radvision's field, video conferencing over IP and 3G networks, is getting warmer by the day, primarily as a result of the major push it is getting from Cisco, Microsoft (MSFT), and IBM (IBM), all Radvision customers. Cisco CEO John Chambers recently recalled how, for the first time in his company's history, he closed an acquisition, in this case of US software company WebEX for $2.9 billion, through a ten day marathon of meetings, which he conducted by conference call without leaving his office. Chambers noted that this technology is saving him a lot of traveling across the globe.

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