Four Israeli firms,

Check Point Software Technologies

(Nasdaq:CHKP),

XaCCT

,

Lasercomm

, and MalNox have made it onto the

Red Herring

list of the world's top 100 companies.

TheStreet Recommends

The list, now in its fifth year of publication, contains 50 public companies and 50 privately held firms that stand out for their innovation, business models and product lines.

The magazine also looked at each company's potential, its strategic performance, the quality of its management team and its financial performance. While all of these factors are meaningful, they become particularly significant during an economic downturn. Or, as Stanford University's business administration professor Jeffrey Pepper explained: "When times are good, even a jackass can run a successful company, and we've seen a lot of that recently."

Over a dozen different sectors are represented in the list, among them software, biotechnology and telecom services. The magazine particularly values firms whose promise lies in their valuable innovative technology. Even though companies such as

Cisco Systems

(Nasdaq:CSCO),

Oracle

(Nasdaq:ORCL) and

Yahoo!

(Nasdaq:YHOO) suffered a decline in sales, the editors still left them on the list, since they expect these companies to overcome their tough financial circumstances, and develop innovative products and services despite the downturn.

Based on this guideline, data storage, industrial software and semiconductor companies top the list. But there are entire sectors that do not appear on the list, such as PC manufacturers still selling beige colored computer boxes. Also gone are online businesses-to-business firms, and retail e-commerce businesses are getting a lot less representation.