At last, a non-iSoft plc entry

Months ago the groundwork was laid for an equity investment in a Spanish IT group quoted stateside. Company finances were scrutinized; background information sought from a contact with pertinent Sevillian knowledge of the controlling family; and assessments formed of the small float, Fidelity’s large stake, the engineering/construction parent and its domestic Spanish market base. It was in the end a “Go”.

Enter Icelandic-controlled UK bank and straightforward instructions regarding a money transfer to a US broker. These were not followed, nor was the oversight picked up and sorted for 6 weeks. Meanwhile the target equity rose a quarter and the opportunity was mostly lost.

That firm was Telvent (TLVT, Nasdaq) - also notable for having royalty sit on its board. And since sucking it up over this opportunity cost (now >30%) the scribe has undertaken plenty of reconnaissance for a replacement. All of which is the lead in to a most interesting little Israeli firm, Ness Technologies (NSTC, Nasdaq).

It is true the scribe has recently acquired equity in NSTC but, please, this is not a recommendation – Ness has under performed since coming to the Nasdaq; and there are plenty of risks listed as per SEC regulations in the company’s last 10K. Along side these must also be considered the increasing commoditization of IT services as well as challenging remaining-year targets for Ness.

However, any CEO (Mr Sachi Gerlitz in this case) who when asked during a conference call to explain his firm's high attrition rates in India can answer “It was just bad management” and spend the next minute or so candidly criticizing his own outfit (before outlining the corrective action made) is a breath of fresh air.

Thus the space between conf-call sweetness & light and outright contrition is now occupied by at least Mr Gerlitz whose middle name, Issachar, means, “rewards will come”.

Fortuitous? Maybe.


*Appears Ness benefits also this US am from a JP Morgan recommendation.


Author holds Ness Technologies equity

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2 comments

  1. C.H. Moreno // 6/01/2007 09:17:00 PM

    Hard luck that, R. It was the only Spanish infrastructure outfit (being basically what it is) that you'll see at value prices for a good while.

    "Bad management", I guess.

    Regards,

    CB

  2. RJH Adams // 6/05/2007 03:36:00 PM

    My own included, unfortunately: although 99/100 times when instructions are sent in writing to a bank one does not expect nothing to happen. An error in execution maybe, but nada?

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