Is the Value in Comverse (CMVT.pk) About to be Unlocked?
Posted on Friday, April 18th, 2008 | In IsraelIOI has mentioned numerous times about the intriguing potential buying opportunity presented in Comverse Technology (CMVT.pk). The huge cash position along with large positions in publicly traded Verint Systems (VRNT.pk) - the jewel of the group- and Ulticom (ULCM.pk), have made Comverse one of our favorite Israeli plays. We have mentionedthat we thought the the company will sell-off their holdings and it appears that this strategy is starting to take place.
Yesterday, the Israeli financial daily Globes reported that Ulticom has retained investment bank Jefferies and Co. to review strategic alternatives. The article also quoted Comverse president and CEO Andre Dahan, “This is the first stage of my strategy. Businesses that are not synergetic with our business can be sold. Although we emphasized in the announcement that there is no deal yet, and that Ulticom’s board might not approve any deal, but this is definitely a step towards the sale of the company.”
Previously we have mentioned that a potential breakup value of Comverse could be worth around the $30 level. Investors looking for an interesting value play, may want to take a long look at Comverse as it appears that the breakup strategy is about to begin.
Disclosure: Author’s fund has a position in CMVT.pk,VRNT.pk and ULCM.pk, fund has no position in any other stock mentioned as of 4/18/08.
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 About Aaron Katsman (http://israelnewsletter.com/)
Aaron is a managing director and the senior portfolio manager of America Israel Investment Associates, Israel Growth Portfolio (www.israelgrowth.com) where he manages a portfolio of Israeli stocks that trade in the US. He is also president of the Global Investments for Profile Investments. Aaron is a frequent contributor to StraightStocks.com, focusing on Israeli stocks. He was a founder and managed the private banking group for Citigroup in Israel for three and a half years. From 1999-2001, he was a senior analyst at a leading Israeli venture capital fund, where he gained an intimate working knowledge of the Israeli hi-tech scene. Aaron holds a B.A. in Political Science from Yeshiva University in New York. He is licensed as an investment advisor by the Israel Securities Authority and holds NASD series 7, 63, 65 in the US. |
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