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Investment managers and analysts alike are wearing whole chicken coops of egg on their faces as shares in FMS Enterprises Migun (TASE: <a target="_blank" href="http://www.themarker.com/eng/tools/toolsResult.jhtml?application=8&chosen=315010">FMS</a>) tumbled this week. But there was at least one analyst who'd been warning of the dangers in investment in the armoring and ballistic textiles maker, since December 2005, no less: Bank Leumi's Haim Bengio.

Back in December, he downgraded his recommendation for FMS to Market Perform, the coolest assessment of the lot.

Even then, Bengio felt that FMS was trading above its true value, after sales stagnated at about NIS 100 million per quarter in 2004. At the time, shares in FMS were trading at about NIS 200.

Then in April 2006, right before it published its 2005 financial statement, Bengio again downgraded it to Underperform, which is tantamount to sell.

He was the only analyst to rock the consensus, and to note the management's lack of transparency.

Bengio noted that FMS had missed its guidance for the year 2005. It had talked about a backlog of $100 million, or NIS 450 million, but ended the year 2005 with sales of NIS 390 million, without noting changes in its backlog during the year.

Moreover, Bengio wrote at the time, FMS even deleted the section about backlog from its first-quarter report. When he asked the company why, he was not happy to have FMS reply that its lawyers said it didn't have to publish backlog figures in its quarterly reports, only in the annual one.

Not only were revenues stagnating. Bengio also noticed that operating working capital shot up during 2005, because customer debt had also climbed, as had inventories. Debt to suppliers meanwhile dropped.

And thus Bengio was one of the few analysts not caught slack-jawed as FMS released its sorry second-quarter 2006 report, which sent its stock diving 28% in a night.

His recommendation remains Underperform, ahead of a meeting with the FMS management today. But his expectations of the meeting are evidently low. As he told TheMarker, the FMS management "talks but says nothing, even to analysts. FMS has always been ungenerous with information and sometimes does it crassly."

How uncooperative is the management? One analyst tells of asking the company accountant, Leah Paz, who also represents FMS before analysts, for the name in English of a rival company in the U.S. FMS had only written the names in Hebrew in its financial statement, but the analyst couldn't figure out which company it meant. She refused to help.

Bengio works for National Consultants, a Leumi group company formed to provide services to institutional investors.