Tue: Security the fairest field of all
A warm recommendation from analyst Gregory Spear has sent Magal Security soaring. What has Magal Security got that NICE System, Verint, Elbit Systems, and Elisra Electronic Systems haven�t got?
Ladies and gentlemen, analyst Gregory Spear is one of the reasons why the Magal Security Systems (Nasdaq: MAGS; TASE: MAGS) share has been on a run. Of course, Spear isn�t doing any manipulation, or anything illegal. He simply unveiled Magal Security recently, as part of his decade-old theory, since he sent his first market letter, that security companies are the true hit of the current century far more than nano-technology, genome, biotechnology, or high-tech companies.
Spear did not light upon Magal Security on April 7 for the first time, when his letter about Magal was published under the headline, �Israeli Security Name Moves Into Focus.� He moved Magal Security into his A-list group in a letter published at the end of March, and several important news websites reprinted the letter on April 7. If you look at the trading volumes in the share since the end of March, you�ll see the effect that Spear�s letter has had.
You may be surprised to hear that Spear has had Magal Security in his investment portfolio since 1995. Only in late March, however, did he put the share on what he calls his A-List for investment. The minute Spear puts a share on his A-List, the public invests in it. The fact is that shares on Spear�s A-List greatly outperform every existing index.
Spear writes, �The company is another �undiscovered� security stock that has been quietly expanding its footprint, particularly since 9/11. Their products are currently used in more than 70 countries worldwide to protect national borders, airports, correctional facilities, nuclear power stations and other sensitive facilities from terrorism, theft and other threats. Magal has subsidiaries in the US, Canada, the UK, Germany, Romania, Mexico and an office in China. In early March, Magal announced that it signed a renewal contract for $3.8 million to protect an international airport in East Europe. Besides different types of security systems, integrated by Magal`s computerized Security Management System (SMS), this project also includes video and data communication systems. We expect many more announcements such as this one in 2004.�
When you read the whole article, you realize that what Spear is actually saying is that 2003 was a transition year, in which Magal changed from a company investing in R&D and accumulating know-how and a reputation, to a company that converts those things into sales. To put it simply, anyone who reads the article understands that this story is only beginning.
I have no doubt that Spear, who was saying the same thing about the security field before September 11, 2001, is right on target. �In Magal Security�s case,� I hear from my pal Steven, who has subscribed to Spear�s newsletter for a long time, �it�s now all in management�s hands. If they�re talented, they can expand sales enormously. The company has already acquired a reputation and excellent products. Its field is huge; to exploit it, management must grasp how to turn a good thing into a recognized brand. There�s no reason why Magal shouldn�t follow in the footsteps of Teva Pharmaceuticals (Nasdaq: TEVA; TASE: TEVA), for example. Believe me, the demand for Magal�s products is no less than the demand for those of Teva. Magal even has a relative advantage in its field, which Teva does not.�
Thanks for posting The Globes article. Shlomo is pretty good with charts. Ariel_Sharon_2002, my TASE chief equity trader issued a STRONG BUY on MAGS on March 22nd. I believe MAGS' mgt was copied on it. The GE-INVN deal is what got our attention, although we have been invested in MAGS for almost a year now.
On TEVA, we did the same several years ago. MERrill's former Chairman/CEO, David Komansky, was one of the first executives in the US to hear about TEVA's potential. He's retired now and quite happy to be long gone MERrill Lynch.
Are you Israeli? If so, what's your take on the departure of Jacob Frenkel from MERrill?
Almost nothing new I can tell you about JF resignation from Merril Lynch. He was the best governor of Bank of Israel indeed. That's it. Since I bought recently a chunk of Lumenis for its present price, I would like JF to spend more time here:
Have a nice day
that link from Globes is the best thing I have seen posted here in quite some time
thanks ... I gave you a rec.
now its up to wall street to see
if the true value of MAGS lies somewhere
between 10 - 40
another opinion on the sector from "globes"
is a little more subdued than
in the prior article ....
"The subject ( terrorism) is in the headlines, In addition, a lot of investors are looking for low-priced security shares, partly for speculation. Investors expect small shares to rise more ..."
... believes that the security shares have become overvalued in the latest surge. "There are a lot of overvalued companies, due to transactions by speculators, rather than by strong institutional investors ...