Investment Manager Recommends Stable Israeli Stocks Like Buying a Bunker
Eitan Etzioni, an investment manager with over 30 years of experience, emphasizes value investing in stable, profitable Israeli companies with strong brands and high entry barriers. After earning degrees in economics from Tel Aviv University and the University of Pennsylvania, he worked on Wall Street before founding his boutique investment firm managing 2.3 billion shekels. Etzioni avoids macroeconomic predictions, focusing instead on insights others miss, and prefers companies with low price-to-earnings ratios.
He advises conservative investors to allocate 18% of their portfolio to Israeli stocks, 12% to foreign stocks (including Israeli companies operating abroad), and 70% to bonds from stable government-related companies like Mekorot, Israel Electric, and Israel Ports, which offer slightly higher yields than government bonds. Aggressive investors are recommended to hold 70% in stocks, with 42% in Israeli equities and 28% abroad.
Etzioni highlights several investment opportunities, including Phoebe, the holding company of Bank Hapoalim, which trades at a significant discount and is expected to close this gap after an upcoming merger. He also recommends Opal Balance, a non-bank credit company, and Libera Insurance, praised for rapid growth and strong management. Other picks include Eldan Leasing, Rega Services (cleaning), Smart Shooter (security), Finergi (renewable energy), Gilat Telecom, and Zanlil (canning).
He points to residential real estate company Azorim as undervalued after a recent 40% drop and sees potential in software companies NICE and Hailan, which have high barriers to competition despite AI concerns. For foreign stocks, he favors Micron Technology for its growth and reasonable valuation compared to Israeli chipmaker Tower Semiconductor.
Etzioni’s philosophy aligns with Warren Buffett’s value investing approach, focusing on companies that will remain profitable over time rather than chasing trends. He describes investing in Phoebe as "like buying a bunker," emphasizing its stability and prudent management.