10 Takes on Investing in Israel

4. Elbit Systems (ESLT): Elbit is an Israeli defense contractor. If you think that the U.S. spends a good portion of its gross domestic product (GDP) on defense, then you will be surprised how much Israel doles out. Not only does Elbit sell within Israel, but it also has foreign clientele as well.

This is one stock that I wish I had been in for some time, but have missed out on. However, the recent market doldrums have Elbit's stock trading in a range which might finally give me an opportunity for entry.

5. American Israeli Paper Mills (AIP): I thought that I would throw in an idea that is not tech or bio-tech related. American Israeli Paper Mills is another small-cap name and it is very "thinly" traded - less than 1,000 shares per day -- and thus I would not be caught with too large a position.

However, something must be going right with this company, as the stock is up 11% this year and 125% in the last five years, including the impact of some very hefty dividends. Consider this: for the first quarter of 2008, American Israeli Paper Mills' sales rose nearly 13% year-over-year and operating profit rose 5.7% year-over-year.

While a relatively small nation, Israel is a source of excellent investment opportunities -- especially in technology, biotechnology and defense. So when you consider international investment opportunities, instead of just focusing on the nations with emerging economies, perhaps you should look at a nation that develops emerging technologies. While there are some Israeli ADRs that you can invest in, including the country's largest company Teva, you might look into using one of the two funds that also provide you with access to local Israeli stocks.

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