One to Watch: Signalling intent

SARANTEL Group makes ceramic "filtering" antennas. It designs antennas for portable wireless devices, including hand-held navigation units, personal and asset tracking, satellite radio, satellite phones and laptop computers.

Sarantel featured recently in the Investors Chronicle as part of an article on technology stocks, offering a significant risk dimension but potential for high returns.

Sarantel was spun out of Symmetricon, a US company, nine years ago. It was floated on Aim in 2005 and its record to date is not exactly inspiring, having made losses ever since, while there has been a decline in revenue over the past two years. Not surprisingly, the shares have collapsed.

However, the thrust of the Investors Chronicle article was to underline the potential offered by the group's GPS-integrated electronic devices. Shipments of GPS-integrated mobile devices are expected to grow in the region of 40 per cent until 2012. Some analysts believe GPS growth will come not only from mobile phones that integrate the technology, but also from mobile consumer electronic devices. Sarantel's technology is in an antenna formed around a core ceramic material, which it claims gives a far better performance than conventional antennas. This claim appears to be based on an argument that conventional antennas suffer by being held close to the human body, while Sarantel's antenna has a filtering process that makes it less vulnerable.

There can be little doubt that GPS is rapidly replacing hard-copy maps and a company like Sarantel could do well. It is certainly a company worth watching but the risks must be acknowledged and this investment is only for the brave.

The value of your investment could fall and you may get back less than you invested. You should take professional advice if you have any doubt about the suitability of this company for your portfolio.

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