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Why Israeli Stocks Look Attractive

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These advantages have translated into substantial gains on the Tel Aviv Stock Market. The TA- 25 is priced near seven-year highs at about 14 times its one-year projected earnings. But that compares with multiples of about 17 times for the Standard & Poor’s 500 Index and 16 times the MSCI Europe Index.

At the same time, Interest rates, already low, may be cut further to prevent the currency’s recent gains from curbing exports and to boost the economy, which expanded at just 2.8% in 2014, the lowest pace in five years, but a better rate than in much of the developed world. The country’s high levels of innovation and openness may bode well for continued growth.

Israeli Stocks Appear Attractive

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Market Realist – Israeli stocks appear attractive.

Israeli stocks (ISL) are trading at attractive valuations. The Tel Aviv 25 Index is trading at 15.7x its trailing-12-month earnings versus its long-term average of 17.7x. Developed market stocks (EFA) look less attractive. The S&P 500 index (VOO) is trading close to its long-term average of 16.7x earnings. Meanwhile, the MSCI Europe Index (IEV) is trading at 21.4x earnings, an 11% premium to its long-term average.

Israeli stocks (ISRA) in the tech sector look especially attractive.

It’s important to look at currency movements when you’re considering investing in global stocks. The Israeli shekel has been quite resilient over the last five years. It’s depreciated by a little over 8% against the dollar (UUP). The shekel has held up well, considering most emerging market (ABE) currencies have depreciated by 20% or more these past five years.

See A Performance Overview of FireEye, CyberArk, and Check Point to learn more about Israeli cyber security stocks.

This article was originally published for MarketViews by dianomi ltd

IMPORTANT INFORMATION

PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS

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Closed-end funds are traded on the secondary market through one of the stock exchanges. The Fund’s investment return and principal value will fluctuate so that an investor’s shares may be worth more or less than the original cost. Shares of closed-end funds may trade above (a premium) or below (a discount) the net asset value (NAV) of the fund’s portfolio. The Net Asset Value (NAV) is the value of an entity’s assets less the value of its liabilities. The Market Price is the current price at which an asset can be bought or sold. There is no assurance that the Fund will achieve its investment objective.

International investing entails special risk considerations, including currency fluctuations, lower liquidity, economic and political risks, and differences in accounting methods. These risks may be enhanced in emerging markets countries. Concentrating investments in the Israel region subjects a Fund to more volatility and greater risk of loss than geographically diverse funds. Equity stocks of small and mid-cap companies carry greater risk, and more volatility than equity stocks of larger, more established companies.

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Source: MSCI.  The MSCI information may only be used for your internal use, may not be reproduced or redisseminated in any form and may not be used as a basis for or a component of any financial instruments or products or indices.  None of the MSCI information is intended to constitute investment advice or a recommendation to make (or refrain from making) any kind of investment decision and may not be relied on as such.  Historical data and analysis should not be taken as an indication or guarantee of any future performance analysis forecast or prediction.  The MSCI information is provided on an “as is” basis and the user of this information assumes the entire risk of any use made of this information.  MSCI, each of its affiliates and each other person involved in or related to compiling, computing or creating any MSCI information (collectively, the “MSCI” Parties) expressly disclaims all warranties (including without limitation, any warranties of originality, accuracy, completeness, timeliness, non-infringement, merchantability and fitness for a particular purpose) with respect to this information.  Without limiting any of the foregoing, in no event shall any MSCI Party have any liability for any direct, indirect, special, incidental, punitive, consequential (including, without limitation, lost profits) or any other damages (www.msci.com).

In the United States, AAM is the marketing name for the following affiliated, registered investment advisers: Aberdeen Asset Management Inc., Aberdeen Asset Managers Ltd, Aberdeen Asset Management Ltd and Aberdeen Asset Management Asia Ltd, each of which is wholly owned by Aberdeen Asset Management PLC. “Aberdeen” is a U.S. registered service mark of Aberdeen Asset Management PLC.

 

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