Roundup / Israel Chemicals hits mark in the second quarter of 2012
Milk production plummets as Israeli cows overheat while war talk makes markets jittery.
Baked cows producing less milk: The hot weather has decimated milk production more than usual this year, farmers claim. The issue isn't the heat or even the humidity, it's that there's been no respite. As their cows bake in the summer heat, farmers in the Galilee and northern Israel usually report a roughly 25% drop, if not more, in milk production – in the hottest month of summer, which this year has become "the hottest months." Dairy farmer Gilad Kramer says the cooling systems he installed in his cow houses to combat the 38-40 degree Celcius heat haven't helped: Production shrank from 42 liters a day to 30 on average for well over a month. No, dairy products aren't running short at stores yet, but stay tuned.
Shorting boom as winds of war blow: It seems the incessant chatter about war with Iran, and that pesky deficit thingie, has unsettled the investment community. After three weeks, speculators reversed directions and shorted the Tel Aviv Stock Exchange big-time. Open short positions on the benchmark Tel Aviv-25 index (of the 25 largest-cap companies listed in Israel) rose to nearly NIS 900 million at the end of last week (Thursday, which is when the trading week ends here). Total shorts on all Israeli securities inched up 1% to NIS 12.4 billion. Speculators in short position post gains when the underlying asset loses ground. In English: If you're short on the TA-25, you're betting it's going to lose ground. If it gains ground, you lose money.
So which stocks, specifically, are speculators shorting, for what this information is worth? Open shorts on ILD Energy shot up 181% to 4.5 million units (worth just NIS 2.8 million, mind you). Shorts on Elbit Systems rose nearly 50% after the CEO, Yossi Ackerman, announced his resignation, and shorts on energy company Delek Group also increased by 50% on squabbling over just who gets to build a pipeline from deep-water gas fields to terminals on shore. EZchip, which disappointed investors with its forecasts for the second half-year of 2012, and Mellanox, which has been leaping like a veritable ibex on the market, were also targeted by short selling.
Israel Chemicals meets Q212 forecasts: Israel Chemicals met analyst forecasts for the second quarter of 2012. The potash behemoth filed its financials on Wednesday morning, reporting a slight increase in sales to nearly $2 billion and a 4.4% drop in net profit to $407 million, just a hair short of the consensus forecast abroad. Actually, local analysts had been rather pessimistic: Jonathan Kreizman of Clal Finance had predicted profit of $393 million on sales of $1.8 billion. Cash flow shot up to $363 million, from $284 million in the corresponding period of the year before.
Investors applaud as Mazor revenues shoot up 470%: Shares of small-cap med-tech company Mazor Robotics, which makes robots to improve accuracy during spinal surgery, shot up 15% on Tuesday after the company reported a 470% leap in revenues for the second quarter, to NIS 11.2 million. Sales of its Renaissance systems were brisk, Mazor explained, as were sales of disposable items and services as more and more medical centers adopt its technology. U.S. sales climbed 14% compared with the previous quarter, and grew 13-fold compared with the corresponding quarter of 2011. Despite all these wonderful things, the company is nowhere near breaking even as it continues to aggressively invest in expanding to new territories. Sales and marketing costs increased 33% year over year to NIS 8.5 million. In short, the company reported an operating loss of NIS 4.4 million.
He's baaaaaaaaaaack: Veteran contractor Uri Dori is staging a comeback, a year after being forced by unfortunate circumstances to divest his conflict of interest in his company U. Dori engineering. He's doing it by buying a 11% stake (with a partner) in real estate company Ortam Sahar from Psagot, an investment house. Psagot had received the Ortam shares in a debt settlement by one of Ortam's previous owners, a company named Dorea. Dori, who has vast experience in the Israeli real estate market, will assume the chair at Ortam, which specializes in civil engineering.
With reporting by Vadim Sviderski, Dror Raich and Yoram Gabison