Internet Gold Overview
February 23, 2005 - Copyright by Morris Rosenthal - - contact info
Company Overviews
Copyright 2005 by Morris Rosenthal
All Rights Reserved
Notes on trading IGLD stock for investing in Israeli stocks
Internet Gold (IGLD) is one of those stocks I have some hands-on experience with, since they are one of the largest ISP's (Internet Service Provider) in Israel. The company has been around since 1996, held a successful IPO in 1999 to list on the NASDAQ, and they announced last week they will be dual listed on the TASE. Internet Gold's primary business is providing Internet access through broadband (both DSL and cable) and dial-up to business and residential customers in Israel. Internet Gold is a partner with Microsoft in the MSN Israel portal, with IGLD owning 50.1% of the joint-venture and MSFT holding 49.9%. According to the company, the MSN Israel site serves up around 2.5 million page views per day to over 200,000 unique visitors.They also have an exposure to th e-tailing business, owning 100% (they just bought in the 54% they didn't own) of P1000 retailer (www.p1000.co.il), which features five main retail categories: Electronics, Computers, Photography, Furniture, and my personal favorite, "The Good Life." For non-Hebrew speakers, The Good Life (HeChaim HaTovim), includes: tourism, sports and exercise, watches and jewelry, toys (only a game controller was listed) and an Adult section. There's also an auction site and various online community options. They also own the 015 telephone service in Israel, which I'm sure I've used at one time or another, which they report reached break even just 6 months after the launch.
IGLD came public in 1999 for around $11, followed the NASDAQ bubble up to a peak of around $25, then plunged to under a dollar, where it flopped around for a year and a half or so. It's been a wonderfully performer since the beginning of 2003, up over 600% fairly volatile trading, and is currently trading 10% below its high mark of $7.25. Average daily volume is over 50,000 shares, so it's pretty liquid for a small cap (around $120 million at current levels). Their 2004 report was released this week, showing year-on-year revenue growth of 29%. Gross margins were reported over 55%, so it's hard to imagine further revenue growth coming through margin expansion. The company is projecting a higher rate of growth in 2005, driven by the telephony and value-added services of the GoldMind subsidiary (not to be confused with GoldTrade). GoldMind is in the anti-malware space, and offers various customized content solutions.
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