MTI, the profitable Israel-based maker of flat panel antennae for fixed wireless broadband, has beamed in strong nine-month figures to September. MTI develops state-of-the-art antennae and systems for military and commercial markets and is led by chief executive Dov Feiner, who spent 12 years in the Israeli Defence Force’s research and development division. The company reported a 44% profits surge to $3.5m (£1.7m), on sales up 21% to $14.3m. Gross margins remained healthily north of 40% and cash flow from operations was $1.6m, leaving the balance sheet flush with $13.9m of net cash.

Supplying its wares mainly to global original equipment manufacturers, MTI speaks for 25% of the global fixed broadband wireless antenna market. Demand from the military market – MTI sells its wares in Israel, North America, Asia and Europe – is buoyant and growing confidence in WiMax, the new standard designed to permit communication between broadband wireless access equipment, is boosting sales of WiMax-compliant antennas.

Feiner insists MTI is well placed to maintain its considerable share of a growing market. ‘There are a lot of companies worldwide,’ he concedes, ‘but our advantage is that we are a one-stop shop, able to make antennas for all kinds of markets, platforms and frequency ranges.’

Analysts are targeting a 75p price for MTI, floated at 39p in 2006 and touching 56.25p earlier this year. For 2007, the market expects profits of $4.9m and 3.9p of earnings, placing the shares on a forward p/e of nine times. Given its robust order book, balance sheet strength and recent move to dividends, MTI is undervalued and should be on your radar. Buy.

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