The launch of the iPhone and iPad, six and three years ago, respectively, was the result of a revolution in hardware. There is now talk about a data tsunami flooding the business and consumer worlds as a result of the smartphone and tablet earthquake. Cloud computing, mobile, social networks, and big data are technological changes taking place at immense speeds and their effect on the future management of business will be dramatic.
So dramatic, that IBM Corporation (NYSE: IBM) chairwoman, president and CEO Ginni Rometty last week predicted that data would be the next natural resource which will change decision-making at enterprises and how they create value. She said that management from the gut and intuition would disappear in favor of management based on advanced analysis of vast quantities of data, and that IBM would lead the development and sales of these management tools for the new era.
There are Israeli companies which are participating in some way in dealing with this next natural resource. For security, Check Point Software Technologies Ltd. (Nasdaq: CHKP) is in the lead, and which is the source of several other thriving companies in the field. Almost unrivaled high-speed data transmission capability at the lowest possible waiting times turned Mellanox Technologies Ltd. (Nasdaq:MLNX; TASE:MLNX) into a $5 billion company and it will sooner or later return to that market cap.
Radware Ltd. (Nasdaq:RDWR) is another company with highly sought-after solutions for the new era. Last week, it announced a joint solution with Mellanox to enable mobile carriers to extract network information to detect and protect against security threats in real-time. The solution is based on Radware's security and application delivery systems with Mellanox's high-speed connectivity solutions. The companies demonstrated the joint solution at the Barcelona Mobile World Congress two weeks ago.
ClickSoftware Technologies Ltd. (Nasdaq: CKSW) is another Israeli company which has been specializing in developing tools for handling mobile data long before the first iPhone came into the world. It has close ties with the industry giants, such as IBM and SAP AG (NYSE; DAX: SAP), which embed its solutions in their projects.
ClickSoftware chairman and CEO Dr. Moshe BenBassat spoke in terms reminiscent of Rometty's remarks last week. At an IBM conference in the US last week, BenBassat discussed smart tools for doing business on the go and how Big Blue embed his company's ClickButler and ClickMobile products in its Worklight platform.
Remarks at ClickSoftware's last conference call imply that the company is on the verge of rapid growth because of the information revolution. Although the company used to focus on workforce management and optimization solutions, the backlog for its mobile solutions has ballooned and they will be its growth engine in the years ahead. Last year, the company also established a special division to supply cloud computing reliability solutions, which are also showing the first signs of strong future growth.
PhotoMedex in, Sigma Designs out
I am adding skin care company PhotoMedex Inc. (Nasdaq: PHMD; TASE: PHMD) to my portfolio and removing IPTV chipset developer Sigma Designs Inc. (Nasdaq: SIGM), which has failed to recover. PhotoMedex will publish its results before the market opens on Wednesday, and given that it has raised its guidance for the fourth quarter of 2012 implies a pleasant surprise.
I believe that PhotoMedex, run by CEO Dolev Rafaeli, has a low market cap relative to its sales and profits. At $15 per share, its market cap is $315 million, and it has over $55 million in cash, and no debt. It will report an estimated earnings per share of $1 on $220 million for 2012. It is traded at a very low profit multiple of 10 for 2013, despite demonstrating strong growth. Most of its sales are for its home painless long-term hair removal product which uses proprietary technology. The product has been very successful in the US and Japan.
In addition to the aesthetics market, PhotoMedex has dermatology products, including a psoriasis treatment on the basis of which it is establishing an chain of clinics in the US, a very promising future growth engine.
PhotoMedex has a $25 million share buy-back program, and its managers and directors own 38% of its 21 million shares. Its short level is relatively high, at three million shares, a quarter of its liquid shares, and a short level that is 20 times the average daily turnover in the share in recent months.
Published by Globes [online], Israel business news - www.globes-online.com - on March 11, 2013
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