Following the holiday recess, "Globes" continues with its weekly feature outlining the investment portfolio recommended by various investment managers operating in the capital market. This column is intended for private investors, paying tax on the interest on their bonds ("net return investors") and seeking securities consultation no longer provided by the banks.
Our experts, all of them seasoned capital market investment managers, have been asked to construct a recommended investment portfolio for each of those three terms, giving detailed reasons. We have imposed no restrictions, recommendations need not even be limited to the capital market, and experts are entirely free to structure the portfolios as they deem best.
"What would you do with NIS 100,000?" is this column's leading question. Recommendations, however, are obviously valid for any investment amount, from NIS 10,000 to NIS 1,000,000.
|
Tamir - Fishman's recommendation
|
|
Portfolio % |
in Shekels |
in Dollars
(at $1=NIS3.35) |
|---|
| ECI |
15% |
15,000 |
4,477 |
| Orbotech |
15% |
15,000 |
4,477 |
New
Dimension |
15% |
15,000 |
4,477 |
| Tower |
15% |
15,000 |
4,477 |
| DSPG |
15% |
15,000 |
4,477 |
| Mofet |
12.5% |
12,500 |
3,731 |
| Rapac |
12.5% |
12,500 |
3,731 |
|
100% |
|
In their recommendations, Tamir-Fishman follow the American practice of focusing exclusively on shares. They like to quote Wall Street guru Peter Lynch: "The most you can get on investing in bonds is your money back plus a little interest". The watchword therefore, is "shares, having regard to the due level of risk, yield a higher return than any other financial asset".
One single investment term
As always, the company emphasises that it does not engage in market forecasts, but rather in forecasts concerning specific shares. They also feel that each investor should choose the risk level appropriate to his assets. Tamir-Fishman moreover disregard, as irrelevant, the tax aspects of investing in shares, especially since every investor has a different tax structure. The tax issue arises, we would remind the reader, in relation to investment in foreign shares (shares, other than Israeli shares, traded on a foreign stock exchange).
As to investment term, Tamir-Fishman recognise long-term investment only. Short-term investment, they say, is identical to market forecasting.
Recommended growth shares
By "growth shares" the company means the shares of companies posting business growth. Conspicuous by their absence from the list are all but advanced technology companies:
- ECI Telecom: one of Israel’s flagship companies, boasting impressive long-term growth and professional management. ECI is traded at a p/e ratio that is relatively low for the sector. This is an interesting example of a company whose value, if it splits into a number of companies, will be higher than it is at present. (Whether Tamir-Fishman know of such intentions on the part of ECI is not clear, as they did not elaborate).
- Orbotech: holds a 60% share of the market in which it operates (testing of printed circuits), and posts consistent growth, while also expanding to new fields. The company has a superior management team and trades at a relatively low price.
- New Dimension Software : This company, which has evidently managed to extricate itself from a profound crisis, operates in an attractive field, is growing and well managed. Many of its products are gaining international recognition.
- Tower: Although it is riding the wave of technological revolution, this company is suffering from the crisis in the semi-conductor field. Traded at lower than equity, its value will increase in time.
- DSP: Plunged into crisis, the company brought in reliable professionals to replace its management team. In needs to expand its product basket. Tamir-Fishman believe it is now on the right road to continued growth.
- Mofet: This is a marketable venture capital fund that has a large number of investments in growth companies. Tamir-Fishman believe the company is trading at less than its value, affording the individual investor a window for investment in a large basket of growth firms (it is important to note that they qualify this recommendation with the caution that they themselves may shortly become Mofet’s issuance managers).
- Rapac: Working alongside a large proportion of Israel’s electronic industry, Rapac’s growth keeps pace. The company also has a subsidiary, Orpac, itself a growth company.
Previous Recommendations:
The above recommendations were made by a person/s working in the investment industry, who may hold positions in securities mentioned in the column. This column should not be taken as advice to buy, sell or continue to hold any securities, and anyone acting on the advice of this column does so at his or her own risk