How to invest in Israel
Copyright 2009 by Morris Rosenthal - - contact info
Startups and Israeli stocks traded on U.S. stock exchanges
A friend of mine in Israel has been developing a unique sales force automation software product for two years, is now past beta testing and is interested in talking to potential investors. You can contact him directly through their website at skanax.co.il.
Everybody knows the old joke about investing in Israel. Question: How can you make a small fortune in Israel? Answer: Start with a large fortune. My own experiences with investing in Israel have been more along the lines of breaking even, so in the relative sense, maybe I have made a large fortune. I chose Israel as one of the four sectors I'm going to write about because I actually spend about a quarter of my time there.
I should really read up on the Bird Foundation and see if there's any possibility of finding my friend an American company to partner.
My main adventure in Israeli investing has been through buying and selling shares traded on the US exchanges, primarily Ceragon, a mature start-up in advanced wireless networking for cellular backbones and corporate campuses. Ceragon trades on the NASDAQ under the symbol CRNT, with a market cap around 130 million and a lot of volume (50,000 to 100,000 shares a day) for a small cap.
One way to sample into the Israeli investing environment is to purchase American Depository Receipts (ADR's) in Formula Systems, which trades on the FORTY symbol on the NASDAQ. Formula recently sold a large chunk of itself to a private concern, so I'm not sure how that will play out, but they are generally considered a well managed fund. However, it's very illiquid, with a daily trading volume around 2,000 shares despite a market cap of almost 200 million.
At the other end of the spectrum from CRNT and FORTY is Teva Pharmaceutical Industries, the well known generic drug maker. At last check, TEVA had a market cap of 17 billion, paid a dollar in dividends, and had a P/E a little over 50. I'd like to be able to tell you that their shares bounce around like crazy, creating trading opportunities, but the truth is, it's been pretty close to straight up for the last 10 years.
A more volatile big-name Israeli stock is Check Point Software, Inc, trading as CHKP on NY stock exchange. Check Point currently has a market cap a little over a 5.7 billion dollars. CHKP has over just over 45% institutional ownership, very similar to TEVA, which is a favorite with individual investors. Unlike TEVA, CHKP had its glory days back in the 90's when computer security was a hit new area, rather than a mature and vital concern.
If you like classic bubble stocks, Internet Gold (IGLD) went public in right before the final NASDAQ run-up, crashed to 2% of its peak value, and is now trading at around a quarter of its peak value.
If you like classic real estate bubbles, I just wrote up a real simple analysis of investing in Jerusalem real estate.
The main site for following daily investment news in Israel is Globes.