Oct 3, 2012 4:02 AM ET–Elbit Systems Ltd. (ESLT) climbed the most in a year in New York as Israel’s biggest non-government defense technology developer secures customers outside of its traditional markets in the U.S. and Europe.
American depositary receipts of Haifa, Israel-based Elbit surged 5.5 percent yesterday to the highest level since April 30, and traded at the smallest discount to the Standard & Poor’s 500 Aerospace & Defense Index in almost five months. The company led gains on the Bloomberg Israel-US 25 Index (ISRA25BN) of the largest U.S.-traded Israeli stocks, which rose 1.5 percent to 87.12. The shares increased 0.4 percent at 9:56 a.m. in Tel Aviv today. Given Imaging Ltd. (GIVN) jumped to a two-month high.
Elbit is rebounding from a six-year low reached on Aug. 28 as it diversifies away from the U.S. and Europe, where defense spending is faltering amid lackluster economic growth. The company, which got 50 percent of revenue from the U.S. and Europe last year, said yesterday that it will supply technology to the Royal Australian Navy and announced on Sept. 23 that it will set up a training center for a Latin American air force.
“Even though these recent contracts are not big, the company wants to show investors that they are progressing in entering new markets,” Guil Bashan, an analyst at Israel Brokerage & Investments Ltd. which rates Elbit buy, said by phone from Tel Aviv yesterday. “Investors are recognizing that they will prevail over time in creating value from entering these markets.”
Israel’s benchmark TA-25 Index, which trades at 11.6 times estimated earnings, declined 0.2 percent today, trimming its advance this year to 12 percent…Read More>>