A Land Play In Israel?

With the influx of Russian immigrants, Israel is one place where real estate is in very tight supply--and very pricey. If you want to play the land game there, you can, through Israel Land Development.

There's little information in the U.S. about this highly diversified company, whose real estate portfolio includes 106 acres of high-priced land in Eilat, Haifa, Jerusalem, and Tel Aviv. It also has four resort hotels in Tiberias, Safed, and Eilat and 1.8 million square feet of retail, commercial, and industrial properties--all carried on the books at very low prices. That's one reason why several investors have been scooping up some of the company's American depositary receipts, trading over the counter at 12 apiece.

One of them is money manager Josephine Jimenez, who scouts for undervalued "hidden-jewel" stocks overseas for the Montgomery Emerging Markets Fund in San Francisco. "Israel Land is one of the most attractive, and still-undiscovered, companies in Israel," says Jimenez. It has big stakes in the media through its acquisition of the late Robert Maxwell's 86.7% interest in Ma'ariv Modiin Publishing, which owns the Ma'ariv newspaper. Israel Land also owns an insurance company and is in the construction business, with contracts valued at $400 million to build housing units for new immigrants.

Jimenez says ILD is both a growth and value play. She figures that the company, which earned 8 per ADR in 1991, will be in the red this year because of costs associated with the Ma'ariv acquisitions. But she sees net of $1.37 next year and more robust earnings in 1994 and 1995. Jimenez figures the company's four hotels alone are worth about $12 per ADR.

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