May's choice for stock of the month is Shamir Optical, an israeli company that makes progressive lenses as its principal product. so far the choice has been less than great; the stock is down. In fairness, however, the pick was a long term selection. It is one which ought to rise in tandem with the aging of the population that might wear these lenses.
there is, however, an explanation in part for the decline of the stock. The Israeli economy is being reclassified so that it is moving from the developing world into the the group that is already developed. As a result, all of those funds which invest in developing economies have been selling Israeli stock and will continue to do so until may 26th at which point they have to be out of the Israeli market. Commencing may 26, all those global funds which invest in developed markets will have to buy into the Israeli economy. The net result of all this is that there has been substantial selling presure on Israeli stocks which will continue for a few more days. Starting on the 26th, however, there will be even larger buying of the Israeli market. This explains the decline of certain bellweathers of the Israeli market like Teva and Partner and Celcom Israel. It also explains the weakness in Shamir. Indeed, Monday and Tuesday of this upcoming week is a very good time to buy Shamir in my opinion.
disclosure: I am long Shamir and have recently added to my positions.
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