Analyst Ella Fried is bullish on the share, even though it may be relegated from the Tel Aviv 75 Index.
Bank Leumi is bullish about Delek Energy Systems Ltd. (TASE: DEOL), run by Gideon Tadmor, even though the Ministry of National Infrastructures yesterday ordered a halt to drilling at Leviathan.
Analyst Ella Fried sees strong buying opportunity for Delek Energy because of its expected relegation from the Tel Aviv 75 Index. She said that a holding in the company is especially worthwhile for "institutions with positioning strength and stamina", despite the company's tax disadvantage.
Fried cites several reasons for her recommendation. First is the company's quantified and unquantified potential (a 30% option on Cypriot offshore Block 12 near Leviathan), which gives it advantages. Second is the possibility that the share will be delisted or converted into other assets. She said that this is where investors' stamina comes into play, because while the share's liquidity will likely decline in the short term - because of its relegation from the one of the top TASE indices - an offer to purchase at a premium over the market price could be very interesting. Delek Energy is the Delek Group Ltd. (TASE: DLEKG) subsidiary through which it controls Leviathan and Tamar partners Avner Oil and Gas LP (TASE: AVNR.L) and Delek Drilling LP (TASE: DEDR.L). Delek Energy's share price rose 1.9% by midday to NIS 1,121, giving a market cap of NIS 5.52 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on May 30, 2011
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