Africa Israel regains favor with Deutsche
Africa Israel Investments has its mojo back, says Deutsche Bank, and upgraded its investment recommendation for the stock from Hold to Buy. Deutsche did, however, lower its 12-month price target for Africa Israel shares from NIS 25.50 to NIS 18, but that's still an upside of 32% from its opening share price Tuesday morning. The bank feels the stock will rally strongly when investors regain their confidence in the company's ability to meet its liabilities, which Africa Israel will achieve by selling U.S. assets, postulates analyst Dan Harverd. Africa Israel and its subsidiaries are undervalued, he says. Investors are evidently worried about the company's ability to meet its debts from 2013 onward, when the principal on its bonds comes due. But Harverd feels Africa Israel has the wherewithal to meet payments through 2014, including by selling noncore assets. The company has been building up its exposure to long-term assets while scaling back noncore business, he notes. (Vadim Sviderski )
Magic reports strong growth in Q4, 2011
Magic Software Enterprises on Tuesday reported its results for the last quarter of 2011 and for the year, presenting growth for the ninth consecutive quarter. The company, which makes mobile and cloud-enabled application and business integration platforms, said fourth-quarter revenues grew 22% year over year to $30.5 million, from $25 million. Fourth-quarter operating profit grew 40% to $4.2 million, from $3 million in the same period of 2010, Magic said. Its net profit increased 42% against the parallel quarter to $4.4 million. For the year, revenues rose 28% to $113.3 million, up 28% from 2010. Operating income for the year grew 58% to $14.7 million, compared to $9.3 million in the same period last year. Magic, which is dual-listed in Tel Aviv and on Nasdaq, said it netted $15 million for the year, an increase of 60% from $9.4 million in 2010. (TheMarker )
Israel Corp. giving Zim another $50 million
The Israel Corporation has approved a $50 million cash injection into its shipping subsidiary Zim Integrated Shipping Services, the company said on Tuesday. The company and its controlling shareholder, Idan Ofer, will in total be giving Zim Integrated Shipping Services $100 million (half each ) by March 31. The money is meant to help Zim comply with its financial covenants with the banks. The problem is that, as global trade slumps, shipping companies have been doing badly: for the third quarter of 2011, Zim reported an operating loss of $91 million, and the fourth quarter seems to have been even worse. During the last quarter, shipping prices fell to levels that do not cover energy costs and fees: Zim is expected to have run up an operating loss of $100 million in the fourth quarter. (Oren Freund )
Nice to deliver good report, predicts IBI
Ahead of Nice Systems' financial statements for the fourth quarter and year 2011, IBI Investment House predicts good reports, showing strong sales and high profitability. Analyst Uri Licht believes Nice will have achieved the upper boundary of its guidance range for the quarter. During the last year, Nice came to realize that the returns on its fat kitty weren't enough: management embarked on a $200 million stock buyback, of which Licht estimates it's used up $100 million to $120 million. It also expanded through acquisition, buying other companies for $300 million. (TheMarker )
Sunflower buying solar parks in Spain again
Solar energy company Sunflower got burned by Spain, but it's resuming investment there anyway. On Tuesday Sunflower reported a memorandum of understanding to buy two solar parks in Seville for 7.5 million euros, some months after the Spanish government unilaterally reduced the price it would pay for solar power, which wiped out a third of the Israeli company's shareholder equity. The deal remains contingent on due diligence. The parks are already hooked up to the national grid. Sources near Sunflower say the company is less vulnerable to regulatory changes in Spain because the government will be subsidizing less. (Yoram Gabison )
Buying Wavion shifted Alvarion to the red
On Tuesday, Broadband communication technology company Alvarion reported a shift to the red for the fourth quarter of 2011, due to costs involved in buying Wavion last November. Alvarion paid $30 million for the Wi-Fi applications company. Alvarion's fourth-quarter revenues contracted by 12% sequentially, to $41.2 million, from $47 million in the third quarter of 2011, and dropped 19% from $50.8 million in the corresponding quarter of 2010. Alvarion reported losing a net $12.2 million in the fourth quarter, or 20 cents per share, which includes costs of $9.3 million on the Wavion acquisition. In the third quarter it had lost a net $7.5 million or 12 cents per share, which includes a $7.1 million loss following the bankruptcy of its customer Open Range Communications (the company had to write off equipment it had shipped to Open Range that hadn't been paid for ). In adjusted terms (excluding nonrecurring items ), Alvarion reported net loss of $2.4 million or 4 cents per share, compared with netting $300,000 or 1 cent per share in the third quarter. (Dror Reich)
Perrigo launches $110m runny nose drug
Drug company Perrigo announced the launch of generic loratidine on Tuesday, in the form of 12 hour extended release tablets. The drug is tequivalent to Schering-Plough's Claritin-D, also an extended-release tablet that is used to treat runny nose caused by allergy. Perrigo is dual-listed on the Tel Aviv Stock Exchange and on Nasdaq. (TheMarker)
