Investment Contrarians

Why Israel Is Hot for Start-ups

By for Investment Contrarians |

Why Israel Is Hot for Start-upsIsrael is not widely known as a hotbed for start-ups, but this dynamic country of 7.9 million people situated on the Mediterranean Sea is just that. The country has the second highest number of start-up companies in the world, trailing only the U.S. There are over 120 Israeli companies listed on U.S. exchanges, including about 60 on the NASDAQ, which makes Israel second only to China on this index. However, a major difference is that Israeli stocks are more trustworthy than Chinese stocks, based on my stock analysis.

My stock analysis is that one of the top Israeli and best stocks listed in the U.S. equities market is pharmaceutical giant Teva Pharmaceutical Industries Limited (NASDAQ/TEVA; NYSE/TEVA), a developer of generic and branded drugs and active pharmaceutical ingredients.

Technology and healthcare are some of the leading industries in Israel, based on my stock analysis. My stock analysis shows that the country has seen a steady rise in technology companies that have performed well on the world stage.

I will mention a few that are good examples, but again, these stocks are not meant as specific investment advice and are more for information purposes, based on my stock analysis.

A small-cap technology stock that has excellent long-term potential for above-average price appreciation is Petach-Tikva, Israel–based ClickSoftware Technologies Ltd. (NASDAQ/CKSW), according to my stock analysis.

Founded in 1979, ClickSoftware creates solutions that allow companies to manage resources efficiently and effectively. The company develops and sells workforce management and service optimization solutions that allow companies to improve productivity, customer satisfaction, and cost effectiveness. Its offices are in Israel, the U.S., Europe, and Asia.

ClickSoftware Technologies Ltd Chart

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A core product is its “Service Optimization Suite.” The software solution provides for proactive customer-demand forecasting, capacity planning, and shift scheduling, in addition to real-time decision-making, scheduling, mobility, and location-based services. The solutions serve a broad range of industries via direct sales and partnerships with leading platform and system integration partners.

Based on my stock analysis, another interesting stock is Israel-based Given Imaging Ltd. (NASDAQ/GIVN), involved as a key player in GI (gastrointestinal) medical devices that enable healthcare professionals to visualize, diagnose, and monitor a patient’s digestive system. Key products include: “PillCam” video capsules for the small bowel, esophagus and colon; “ManoScan” high-resolution manometry; and “Bravo” wireless and “Digitrapper pH-Z” and impedance products.

Given Imaging Ltd Chart

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Given Imaging has operations in Israel, the U.S., Germany, France, Japan, Australia, Vietnam, Hong Kong, and Brazil.

The stock is just above its 52-week low, where there may be a good opportunity for contrarian investors looking for a bounce, based on my stock analysis.

A small retail solutions company that looks interesting, based on my stock analysis, is Israel-based Retalix Ltd. (NASDAQ/RTLX). Founded in 1982, Retalix develops software and hardware solutions that enable gas stations, convenience stores, and other small retailers to become more efficient in real-time monitoring, and managing their inventory, fuel sales, and sales flow. This includes POS (point of sale), sales channels, store, customer, marketing, merchandising, logistics, and transportation management. The solutions also include customer and supplier relationship management, ERP and business intelligence, distribution operations, and master data management.

Retalix Ltd Chart

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The solution is geared for companies with high-volume sales flow in what Retalix terms as “Fast Moving Consumer Goods” retailers and distributors.

Clients include supermarket, grocery, convenience, fuel, health and drug, and department stores. Installed services include about 70,000 stores and over 400,000 checkout lanes located in over 50 countries. Operations and offices are found in Israel, the U.S., England, Italy, Australia, Japan, and China. Retalix has good potential, based on my stock analysis.

So while the U.S. will continue to be the top producer of start-ups, Israel is a region that will offer investment opportunities, based on my stock analysis.

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