Silicom Ltd. (SILCF)

[midastouch017]

For companies like Top Image, Eltek (Nasdaq: ELTK), Commtouch Software Ltd. (Nasdaq: CTCH), Silicom Connectivity Solutions Ltd. (Nasdaq: SILCF), and Mind CTI (Nasdaq: MNDO; TASE: MNDO), monitoring them at the current stage of their business life spans should come only after the companies make sales. All the other parameters involve streamlining, which they’re all doing anyway. If sales are rising, and the management of these companies believes that their future is before them, then they’re all worthwhile investments. Top Image is not interesting just because of a deal of the kind just announced. Top Image is interesting mostly because of its technology and its sector. Incidentally, growth in all the companies I mentioned is organic. Yes, Mind CTI acquired a company, but it was a strategic acquisition, and its effect on the company’s cash was fairly small. Organic growth indicates a direction. Top Image is operating in a rapidly growing field, and it’s now all in the hands of CEO Ido Schechter and the company’s very experienced board of directors. There’s no reason why the Top Image shouldn’t make a breakthrough.

I’ll wind up with G. Willi-Food International (Nasdaq: WILCF; TASE: WLFD). Quietly, with no fuss, the share has risen 30% since the beginning of the month. Its results have improved significantly, and the company is starting to distribute dividends. That’s excellent news, but it’s not enough to make the share zoom like that. What could the reason be? I believe that the company’s management hasn’t given up on the idea of acquiring a US distributor. The US kosher food market is too good and attractive for the Williger brothers to give up on. Furthermore, during their first due diligence process, they became familiar with the fleshpot that goes by the name of the US ethnic food market. Their first effort failed, rightly so as far as management was concerned, because they found too many problems in the course of due diligence. The US does not lack food marketing companies, and a little birdie from New York whispered to me that another round is underway now. Knowing the owners as I do, it’s hard for me to believe that the acquisition won’t go through.

Published by Globes [online] - www.globes.co.il - on November 24, 2005

http://www.globes.co.il/serveen/globes/docview.asp?did=1000032903&fid=1052

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