I posted this on yahoo
9 Mar 04 17:40
The “Wall Street Transcript” interviewed fourteen investment managers, nineteen investment bankers and financial experts, and managers of eleven small companies listed in New York. Of particular note was what Senvest International president Richard Mashaal said. His company manages a fund named Senvest Israel Partners, which specializes in investments in Israeli companies, and has $12 million in capital. The “Wall Street Transcript” interviews were an attempt to anticipate the effect that the new Sarbanes-Oxley regulations concerning convertible bond issues and the distribution of options to managers and parties at interest will have on these and other companies, and to learn which type of shares will make worthwhile investments.
Mashaal explained that his firm’s investment methods were based on what he called “investment in a merger of values and strong growth”. That means that most of its investments were in technology companies in growing fields, with shares having relatively high economic quality.
Senvest has a preference for flash chip technologies, and has therefore invested in M-Systems Flash Disk Pioneers (Nasdaq: FLSH) and SanDisk (Nasdaq: SNDK). Senvest stresses companies’ management strategy, and they believe that M-Systems’ management is excellent. According to Mashaal, M-Systems has taken marvelous advantage of the opportunities in its field, which is not the case with Intel (Nasdaq: INTC), for example. Mashaal believes that Intel made an error in its strategy for the flash industry, probably due to its excessive concentration on microprocessors.
Mashaal pointed out that M-Systems operated in two fields with extremely rapid growth: personal storage (DiskOnKey DOK), and memory chips for wireless telephones. Interestingly, he believes that M-Systems’ problem is that the analysts covering the company have an Israeli orientation. “They aren’t analysts for technology shares; they are analysts for Israeli shares,” he said. He thinks that because of this coverage, M-Systems still suffers from lack of exposure to US and global institutional investors.
For Senvest, there is a huge difference between an analyst specializing in Israeli companies, and a US analyst. This is one of the biggest problems facing Israeli (and other non-US) companies traded in the US lack of suitable analyst coverage. Most, of course, are not covered at all, while a few have coverage that may very well be the best, but is not the most suitable. |
