A year ago, IDB (TASE: IDBH) aka Nochi Dankner bought the controlling interest in the holding company Koor Industries (NYSE: KOR). It serves as conduit through which IDB owns controlling interests in Makhteshim Agan Industries (TASE: MAIN) and ECI Telecom (Nasdaq: ECIL). The main problem with a holding company is that some of the value (typically 10 - 15%) will not pass to shareholders. Koor owns 39% of Makhteshim Agan and 30% of ECI. Its stake in Makhteshim Agan, an agrochemicals company, is worth $1.3 billion. Its holdings in ECI, which makes equipment for phone companies, is worth $300 million. Koor itself is traded at a company value of $1.05 billion. Even if we deduct Koor's net liabilities and add privately-owned assets, mainly holdings in hi-tech startups, we see that it's trading at a discount of 25% to 35% to its net asset value. In the last year Dankner has been cleaning out Koors secondary holdings. Since most of its privately held holdings have been sold, its ability to expose hidden value is all but gone. Koor is still a cheap way to invest in ECI or Makhteshim Agan, in the hope that IDB will issue a tender offer.
Thursday, April 26, 2007
Guru Ginzborg said buy Koor and I did
Ami Ginzborg from HaAretz, my wife's forest-killing far-left fish-wrap, wrote today that Koor was a good buy. I suspect there was only one sucker who ran and bought the stock, because I paid 2% over yesterday's close and then it went down.