LanOptics' Recent Recovery

A small Israeli stock in my portfolio, LanOptics Ltd. (LNOP), stood out this week, since it recovered from the crisis at an amazing speed, hitting two-year highs during Friday's session.

Friday's gain was apparently the result of a prominent report by a technical expert on "TheStreet.com" whose headline described it as a "small-cap tech stock that could break out." On a day of sharp gains, a report like this is enough to fuel any small stock. In addition, at the beginning of the week, LanOptics sold 800,000 shares at $14.88 each to a private investor named James Cheney.

In my view, this sale of 800,000 out of an open prospectus for 2.5 million shares, strengthens those investors who believe the company has a great future, even it is traded at a level that reflects a value of at least $350 million for its sole asset, EZchip Technologies Ltd. It turns out that the "anonymous" investor is a longstanding member of George Gilder's forum and the latter's enthusiasm over EZchip's network processors apparently played a key role in his decision to invest $11.9 million in one company.

LNOP 1-yr chart:

Published originally by Globes [online], Israel business news - www.globes.co.il © Copyright of Globes Publisher Itonut (1983) Ltd. 2006. Republished on Seeking Alpha with full permission.