Despite the global hi-tech slowdown, Israeli technology companies are an attractive long-term investment, Lehman Brothers says.
Yesterday Merrill Lynch analyst Ilana Treston also wrote that most of the Israeli companies the bank covers are attractive in the long term.
Lehman is initiating coverage of seven more Israeli companies with relatively low market caps. All seven are also characterized by innovative technology, a tightly-focused management and hidden value, say the analysts.
(Nasdaq:CAMT), rated a Buy based on demand for small devices with computing capacity, such as mobile phones and digital cameras. The demand for these devices will create a need for denser printed circuit and more layers, which will in turn increase the need for systems to inspect these PCBs. Camtek makes exactly these test kits. Lehman bases its $6.88 target price on a conservative multiple of 12.5 regarding its projected earnings in 2001 and 2002.
(Nasdaq:ELRNF), Lehman says its portfolio includes a number of promising public and private-held hi-tech companies. Despite the tough market, which will prevent Elron from exiting its investments any time soon, Lehman believes long-term investors will benefit from Elron's portfolio. Lehman calculates that Elron is traded at a 22% discount from its net asset value.
Much the same goes for _
(Nasdaq:LNOP). Its main holding is
. Lehman does not see EZchip generating positive cash flow for a couple of years. But given the $122 million company value at which EZchip recently raised financing, the bank believes that the moment it has a product ready to market, it will be a great candidate for a takeover. Lehman assumes that when that happens, Lanoptics can more than $122 million for it.
The cash alone
(Nadsaq:NVMI) can boast is worth $3.9 per share, which is 72% of the company's market value. Despite the semiconductors slowdown, Lehman says there is real value in Nova's wares, for investors with a long-term perspective. Nova is traded at a multiple of 9 on its expected 2002 earnings.
Lehman expects positive developments at
(Nasdaq:SCIX) in the next 1-1.5 years. There are signs that subsidiary Creo is growing after its merger with Scitex's preprint division. Lehman also entertains high expectations of SDP, which is penetrating the market with its VersaMarkl printer. Thirdly, Aprion Digital is expected to commence sales of its wide-format printing machines. Lehman says that Scitex is traded at a discount of 34% compared with its net asset value but adds that investors will have to have patience for this one too.