About Ituran Location & Control Ltd.

Ituran Location and Control Ltd., together with its subsidiaries, provides location-based telematics services and machine-to-machine telematics products. The company's Telematics services segment provides stolen vehicle recovery and tracking services, which locate, track, and recover stolen vehicles for its subscribers; fleet management services that enable corporate and individual customers to track and manage their vehicles in real time; and locator services that allow customers to protect valuable merchandise and equipment. It also offers on-demand navigation guidance, information, and assistance, including the provision of traffic reports and directions, as well as information on the location of gas stations, car repair shops, post offices, hospitals, and other facilities; and Connected Car, a service platform that includes a back-office application, a telematics device installed in the vehicle, mobile apps for IOS and Android users, and interface using the car infotainment screen, as well as usage based insurance and auto financing.

This segment serves insurance companies and agents, car manufacturers, dealers and importers, cooperative sales channels, and private subscribers. Its Telematics Products segment provides Base Site, a radio receiver that includes a processor and a data computation unit to collect and send data to and from transponders, and to control centers; Control Center, a center consisting of software used to collect data from various base sites, conduct location calculations, and transmit location data to various customers and law enforcement agencies; navigation and tracking devices installed in vehicles; and SMART, a portable transmitter installed in vehicles that sends a signal to the base site enabling the location of vehicles, equipment, or an individual. The company was incorporated in 1994 and is headquartered in Azor, Israel.

ITRN operates in the Wholesale Trade | Wholesale | approximately 2,810 employees | led by CEO Eyal Sheratzky.

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## Investment Thesis Ituran Location & Control Ltd. (ITRN) currently ranks **#6** in our coverage universe of 3,571 U.S.-listed equities, with a composite score of **80.4/100**. This places the stock in our **"Strong Buy"** category based on our proprietary six-factor quantitative model. The bull case rests on three pillars: exceptional profitability (Quality score: 98/100), favorable market dynamics (Momentum: 86/100), and reasonable valuation relative to quality (Value: 80/100). Our model, built on 46 peer-reviewed academic studies, identifies these factor combinations as historically predictive of outperformance. The central question for investors: **Is ITRN's quality premium justified by its growth trajectory, or has the market already priced in perfection?** --- ## Company Overview Ituran Location & Control Ltd. operates in the **Consumer Staples** sector and has demonstrated modest revenue growth of 5.1% over the trailing twelve months. The company converts 16.8% of revenue into net income, a healthy margin profile. At $612M, ITRN is a mid-cap company with potential for significant growth but also higher volatility. --- ## Our Six-Factor Analysis Our proprietary model evaluates every stock across six factors, each backed by peer-reviewed academic research. Here's how ITRN scores: ### Quality Score: 98/100 ★★★★★ **What we measure:** Return on equity, return on assets, gross margin, net margin, earnings consistency, and accruals quality. ITRN generates a return on equity of **30.4%**, exceptional by any standard and indicative of a highly efficient capital structure. Gross margin of **47.8%** reflects competitive industry dynamics. Net margin of **16.8%** is healthy and provides cushion for operational headwinds. **Academic evidence:** Research by Novy-Marx (2013) demonstrates that quality stocks outperform by 4-6% annually over long periods, even after controlling for market beta. --- ### Value Score: 80/100 ★★★★★ **What we measure:** P/E, P/B, P/S, EV/EBITDA, and free cash flow yield relative to sector and historical norms. ITRN trades at **11.40x earnings**, a significant discount to the market, suggesting either value opportunity or fundamental concerns. Price-to-book of **3.30x** reflects significant intangible value and growth expectations. **Academic evidence:** Fama and French (1992) established that value stocks (low P/B, P/E) outperform growth stocks by 3-5% annually, though this premium has compressed in recent years. --- ### Momentum Score: 86/100 ★★★★★ **What we measure:** 12-month price momentum, revenue growth acceleration, earnings surprise frequency, and relative strength. Revenue growth of **5.1%** reflects mature market conditions. Our timing model assigns a score of **56.494680013610306/100** with a **Favorable** signal, suggesting neutral timing. **Academic evidence:** Jegadeesh and Titman (1993) documented that stocks with strong 6-12 month momentum continue to outperform over the subsequent 3-12 months, generating 1%+ monthly alpha. --- ### Investment Score: 99/100 ★★★★★ **What we measure:** Asset growth, capital expenditure intensity, acquisition activity, and capital allocation discipline. An investment score of 99/100 suggests ITRN is deploying capital effectively to drive future growth. **Academic evidence:** Titman, Wei, and Xie (2004) found that companies with high asset growth subsequently underperform, suggesting capital discipline matters. --- ### Stability Score: 34/100 ★★ **What we measure:** Beta, earnings volatility, balance sheet strength, debt levels, and cash flow consistency. Beta of **0.82** indicates market-level volatility. **Academic evidence:** Low-volatility stocks have historically outperformed high-volatility stocks on a risk-adjusted basis—a phenomenon known as the "low-volatility anomaly" (Baker, Bradley, Wurgler 2011). --- ### Short Interest Score: 98/100 ★★★★★ **What we measure:** Days to cover, short interest as percentage of float, and short interest trend. A short interest score of 98/100 indicates limited bearish positioning. --- ## Economic Moat Assessment Based on our analysis of profitability metrics, competitive positioning, and sustainability of returns, we assess ITRN's economic moat as follows:

Moat Type	None
Moat Width	Narrow
Uncertainty	High

- Exceptional profitability metrics suggest pricing power --- ## Fair Value Estimate We employ a reverse discounted cash flow methodology to estimate fair value, working backward from the current price to determine what growth assumptions are implied. ### Three-Scenario Analysis

Scenario	Implied Fair Value	Upside/Downside	Assumptions
Bear	$805M	+31.6%	Assumes 8% 5-year growth, 18x terminal P/E, 12% discount rate
Base	$1.5B	+140.0%	Assumes 12% 5-year growth, 25x terminal P/E, 10% discount rate
Bull	$2.6B	+317.4%	Assumes 18% 5-year growth, 32x terminal P/E, 9% discount rate

### Probability-Weighted Expected Return Assuming 20% bear, 50% base, and 30% bull probability weights: **Expected Return: 171.5%** --- ## Peer Comparison How does ITRN stack up against sector peers?

Company	BCR Score	P/E	ROE	Net Margin
ITRN (This Stock)	80.4	11.40	30.4%	16.8%
GWW	80.1	26.35	32.2%	6.9%
FERG	79.9	24.98	39.4%	7.0%
SEB	79.9	9.05	6.8%	4.3%
MNST	79.7	38.06	27.7%	23.9%
DPZ	79.4	26.61	-17.6%	12.2%

ITRN scores higher than all shown peers, suggesting superior factor profile. --- ## Risk Factors Every investment carries risk. Here are the key risks for ITRN: ### Valuation Risk ✅ LOW The current valuation provides reasonable downside protection. ### Competitive Risk ⚡ MODERATE Competitive dynamics in this sector require ongoing investment and strategic adaptation. ### Execution Risk ⚠️ HIGH Below-average stability scores suggest earnings volatility and potential execution challenges. ### Macro Risk ⚡ MODERATE All equities are subject to macroeconomic conditions including interest rates, inflation, and economic growth. A recession could impact earnings regardless of company-specific quality. --- ## Financial Deep Dive ### Income Statement Analysis **Gross Margin: 47.8%** — Healthy margins typical of established businesses. **Operating Margin: 21.2%** — Solid operational performance. **Net Margin: 16.8%** — Healthy bottom-line performance. ### Balance Sheet Analysis **Return on Equity: 30.4%** — Exceptional capital efficiency—top decile performance. ### Cash Flow Indicators **Revenue Growth: 5.1%** — Steady growth reflecting mature market position. --- ## Investment Decision Framework ### Who Should Buy ITRN? ✅ **Long-term investors** seeking quality exposure ✅ **Factor investors** targeting quality and momentum ✅ **Portfolio builders** needing Consumer Staples sector exposure ✅ **Income investors** seeking dividend yield ### Who Should Avoid ITRN? ❌ **Deep value investors** seeking bargain prices ❌ **Short-term traders** seeking high volatility ### Position Sizing Recommendation Based on our factor profile and risk assessment: | Portfolio Size | Suggested ITRN Weight | |----------------|---------------------------| | $10,000 | $800 - $1,200 | | $100,000 | $8,000 - $12,000 | | $1,000,000 | $80,000 - $120,000 | --- ## The Bottom Line Ituran Location & Control Ltd. represents **a compelling investment opportunity** based on our six-factor quantitative analysis. The company's quality metrics are exceptional, while its valuation offers attractive entry point. Our fair value analysis suggests **upside potential of 140%** under base-case assumptions, with probability-weighted expected returns of **172%**. We recommend accumulation, particularly on any pullbacks that improve the risk-reward profile. ---

--- ## Methodology Disclosure This analysis is based on the Blank Capital Research six-factor quantitative model, which evaluates securities across Quality, Value, Momentum, Investment, Stability, and Short Interest factors. Factor weights are derived from 46 peer-reviewed academic studies and calibrated to current market conditions. Our fair value estimates employ reverse discounted cash flow analysis, working backward from market price to implied growth assumptions. This methodology is inherently uncertain and should be considered as one input among many in investment decisions. --- *This report was generated on Monday, February 16, 2026. The analysis reflects data as of that date. Past performance does not guarantee future results. This is not investment advice. Blank Capital Research may hold positions in securities mentioned.*