A friend of mine attended the 15th Nasdaq conference in London a few days ago, sponsored by Morgan Stanley, and was impressed by Israeli wireless operator Partner Communications Co. Ltd. (Nasdaq: PTNR; TASE:PTNR; LSE:PCCD). Check Point Software Technologies Ltd. (Nasdaq:CHKP) and M-Systems Flash Disk Pioneers Ltd. (Nasdaq:FLSH) were also present at the US investment house giant-sponsored event.
Why was my friend impressed by Partner, a company with what seems to be a limited number of customers, and which competes in a fairly small market against Bezeq (TASE:BZEQ), Cellcom , Pele-Phone, and MIRS Communications? First, he claims that Partner's management knows exactly what it wants and where it is going. He began to tell me about the trials Partner is conducting with Nortel (NYSE; TSX:NT) on one hand, and with Hong Kong 3 and Research in Motion Ltd. (Nasdaq:RIMM) on the other.
Partner, as a company whose business is mostly in Israel, has not been mentioned frequently, if at all, in this column. But since I'm only hearing good things about this company from every direction, and, meanwhile, it is belying experts predictions and meeting all its management's promises and more, it seems that I erred in not mentioning it more often.
My friend, a communications professional, told me that companies like Partner have great growth potential "not only in Israel, where it is possible to continue launching new technologies and switch entire populations to next-generation cellular. It has all the possibilities of telephony over wireless networks, not to mention parent company Hutchison-Whampoa's (HKSE:0018) coverage, which gives Partner the chance to use technologies being developed both in Israel and elsewhere."
Let us now take a look at Eltek Ltd. (Nasdaq: ELTK). It is again profitable. Eltek has $30 million in annual sales, and will probably post a profit this year. More importantly, it has excellent products. It is a fact that its circuits drive Given Imaging Ltd.'s (Nasdaq: GIVN; TASE:GIVN) capsule endoscopes and a few other things as well. This is a company with an manufacturing center in Germany, with entry to the euro market and Eastern Europe. Let's say that Eltek's share is worth a lot more than yesterday's price of $2.23, but I recommend waiting in the wings until the stage is clear of speculators.
Meanwhile, 1.4 million shares have been added to Eltek's floating shares, over 25% of its paid-up capital. These shares, sold during March and April, mostly belong to Joseph (Yossi) Maiman and some senior executives. In retrospect, I cannot but congratulate them for exploiting the situation. They apparently knew about the approaching tornado and escaped in time.
From this point on, it will be very worthwhile to closely monitor this tiny company. If the share continues to fall until the ground is clear, it will definitely be worthwhile buying, until the next tornado strikes, enabling you to get out of the investment with honor.
Published by Globes [online], Israel business news - www.globes.co.il - on May 25, 2005