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As we’ve said repeatedly, Israel has a stable of really interesting microcap/smallcap companies trading under most investors’ radars. Cimatron (NASDAQ:CIMT) is one of these plays that is worth a look.

Sporting a micro-cap of less than $25M, Cimatron provides investors with a profitable microcap with cash on the books, and which is poised to see some nice growth in the future. CIMT competes in the competitive CAD/CAM space for the tooling and manufacturing vertical. As much of manufacturing is pushed offshore, Cimatron continues to see nice growth from foreign markets — so much so, that it's purchase two tranches of its Italian distributor, Microsystem, with a call option to purchase the remaining shares.

Cimatron was up almost 15% on Monday (and over 125% on the year) off of the strength of its conference call, that was held in China.

I thought it’d be useful to highlight some points from the conference call that got the market so excited:

  • Microsystem had $10.5M in revenue in 2006 and poised to continue to grow profitably. Looks like earnings will become accretive in Q32007.
  • Launch of Cimatron 8.0 appears to be really interesting for the company, as it positions them in a new market, the die design market. The company expects organic growth from this new target market in the quarters ahead.
  • In terms of geographical sales, CIMT sells 57% in Europe, 23% in the Asia Pacific, 12% in North America and 8% in the rest of the world.
  • The company said that they are focused on increasing shareholder value. Look for some more M&A in the future.
  • Cimatron is an interesting little play that is deserving of some serious research.

    Disclosure: The author’s fund has no position in any stock mentioned as of October 28, 2007.