Investment house Nessuah Zannex has given

Koor Industries

(NYSE:KOR) an Accumulate rating, and set a price target for the stock of NIS 240, which is 30% higher than its current market price.

The bank believes that Koor's new strategy, which focuses on telecoms, security and agrochemicals, will bear fruit in the long term. The bank feels the new strategy will maximize the firm's inner resources, decrease its control parameters and improve its synergy as a group.

Nessuah Zannex analyst Haim Israel believes that Makhteshim Agan, in which Koor has a 60% interest, will be Koor's main source of revenues and earnings. The chemical company's sales in 2000 should reach $875 million. Earnings per share in 2001 are expected to come to 18 cents, which is 28% higher than in 2000. Israel says that Makhteshim Agan added seven new products in the fourth quarter of 2000, which are expected to increase its sales by $100 million during the next three years. The products will help Makhteshim Agan increase its penetration and presence in several new target markets including Germany, Japan, Scandinavia, and South Korea. It should also help the firm decrease its dependence on the Brazilian market, which currently accounts for 30% of the company's sales. Israel has set a price target for the firm of NIS 13.2, which is 41% higher than the current market price.

Koor's telecom holdings consists of a 100% stake in

Telrad Networks

, a 28% stake in

Nortel Networks Israel

(NYSE:NT), and a 33% holding in

ECI Telecom

(Nasdaq:ECIL). The aggregate value of these holdings comes to NIS 3 billion in Koor's balance sheet.

The analyst believes that Koor stock is currently under-priced because of the market's poor sentiment on telecoms, the timing of ECI's restructuring into separate companies, and because of ECI's controversial credibility as far as investors are concerned.

Israel feels that once the value of the telecom companies has been stabilized, it is possible that the aggregate value of ECI's units will expose the true value of the company, although this is unlikely to happen in the near future.

Nessuah Zannex believes that the Elisra-Tadiran security-sector group, which Koor owns fully, could help increase the Koor group's cash flow. Elisra Tadiran could itself benefit from Koor's venture capital fund expertise in order to split off its own activities and start ups.

Israel also believes that Koor Capital Markets, which is fully-owned by Koor, could help the group establish a presence in the foreign telecom markets. Israel feels that Koor will leverage its venture capital fund activity in order to retain the technological edge of its holdings. Koor values KCM at $114 million, based on the company's aggregate investments.

Israel believes that Koor will not reach an outperform yield on the TA-100 index of the Tel Aviv Stock Exchange in the medium term, because the group is presently in the midst of a reorganization. Israel expects that the non-too promising global economic events, especially in the telecom sector, will affect Koor's future performance.