Orbotech Jumps on TV Demand Ahead of Holidays: Israel Overnight
Orbotech Ltd. (ORBK), the biggest Israeli maker of gear used to test televisions and smartphones, surged to a three-month high in the U.S. on prospects demand for multimedia products will climb heading into the holiday season.
The Yavne, Israel-based maker of quality-control equipment jumped 1.7 percent to $8.60 in New York yesterday, the highest level since June 27. Orbotech, which trades at a 37 percent discount to the average multiple for companies on the Nasdaq Composite Index, has advanced 13 percent this quarter after slumping 34 percent in the second. The Bloomberg Israel-US Equity Index (ISRA25BN) of the most traded Israeli stocks in the U.S. dropped yesterday, led by Cellcom Israel Ltd. (CEL)
Orbotech tumbled 24 percent in June after the company cut its 2012 revenue estimate by as much as $70 million and said employee practices in South Korea were being investigated. The company’s discount to other technology shares is luring investors as LCD screen manufacturers such as AU Optronics Corp. (2409) and LG Display Co. also gain in the quarter, according to National Securities Corp.
“The company’s outlook announcement lowered the bar and investors are resetting expectations and finding a level where they can get into the stock,” Darice Liu, an analyst at National Securities, who has the equivalent of a hold rating on Orbotech, said in a telephone interview from New York yesterday. “The display industry has been in the doldrums and there are glimmers of hope that the market may improve, especially heading into the holiday season.”
American depositary receipts of Taiwan-based AUO have gained 23 percent this month, the most in three years, while ADRs of LG Display are poised for a fourth straight month of gains of more than 5 percent.
The Bloomberg Israel-U.S. Index slid 1.5 percent to 86.24, declining for the first time in six days and paring its advance this month to 2.5 percent. The Tel Aviv Stock Exchange, closed for the Yom Kippur Jewish holiday, reopens for trading tomorrow.
Cellcom, Israel’s largest mobile-phone provider, retreated 9.3 percent to $8.46. The Tel Aviv shares climbed 2.5 percent to 34.75 shekels, or $8.91 on Sept. 24. MagicJack VocalTec Ltd. (CALL), the Israeli company whose founders invented the technology used for making phone calls over the Internet, sank 9.2 percent to $24.02, the most since May 30.
Teva Pharmaceuticals Industries Ltd. (TEVA), the world’s largest maker of generic drugs, rose 1.9 percent to $41, trading at a $1 premium to its shares in Tel Aviv, which closed at 155.9 shekels, or $39.97, on Sept. 24.
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