Wednesday, August 1, 2007

Aladdin Knowledge Systems Ltd.

Aladdin Knowledge Systems Ltd. is a NASDAQ listed security that has been trading in a range between $13.58 and $23.95 over the past year. With 14,272,250 shares outstanding, a recent price of $22.96 gives a total market capitalization of $319,270,244. While there are certainly larger companies, Aladdin Knowledge Systems Ltd. has definitely earned its place in the pack. Last year, Aladdin Knowledge Systems Ltd. created $0.94 in earnings for every share outstanding.

Aladdin Knowledge Systems Ltd. is currently priced by the market at 24.30 times last year’s earnings. Many trading multiples around the world are quite attractive these days, but don’t be fooled. A Price to Earnings ratio of 0 simply means that the security didn’t make any money last year.

With a share price under $50 a share and earnings per share below $1 a share, Aladdin Knowledge Systems Ltd. could be an interesting value proposition. Consistent earnings are the key to high valuations and this security is well on its way.

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