CIBC Oppenheimer analysts believe that Koor Industries (NYSE:KOR) is on the path to recovery, and will return to the black by year-end.

Analysts Shaul Eyal and Ittai Kidron rate Koor a Strong Buy and set a price target of $7, which is 44% above its current market level.

The company's second-quarter financial statements indicate a return to stability by most of its holdings, and considerable improvement in its defense group Elisra. Agrochemical company Makhteshim Agan Industries had a solid quarter despite the Brazil crisis.

ECI Telecom (Nasdaq:ECIL), however, gave a more mixed message and lowered its guidance for the third quarter.

The worst problem Koor faces in the third quarter is Telrad Networks, which is expected to continue showing a decline in activity with Nortel, and to undergo reorganization.

On the sale of Elisra to Elta, the analysts note that they see no particular delays that could hold up the deal's finalization, subject to trustbuster approval.

Oppenheimer estimates Koor's net value at $534.5 million - $330 million Elisra, $280.6 million Makhteshim, and $150 million for Telrad. Koor's venture capital arm, which has invested $138 million so far, is evaluated at $80 million. The ECI holding is estimated at $68 million.

All that totals almost $910 million: minus its debts, that comes to a net value of $534.5 million, whereas Koor's market cap is $370 million.

Oppenheimer foresees serious writeoffs for ECI in the second half, given that in the second quarter Koor booked it at $7 per share, whereas its market value is $2 per share. Koor has stated that it will have ECI re-evaluated.