Gamble of the week: Israeli-based telecoms designer

This unloved Israeli-based designer of telecoms products has truly mouth-watering prospects, says Paul Hill. A buy for the brave.

The stockmarket can be a brutal place for small caps. Take BATM, the Israeli-based designer of telecoms (65% of sales) and medical (35%) equipment. Its shares crashed 30% after a profit warning in mid-December. It blamed a "softening in demand from certain US operators for its legacy products". In response, the board is "undertaking a strategic review with the possibility of withdrawing from this segment in 2012".

However, these older, low-margin products account for only about 15% of turnover, with the firm's main bread winner being its exciting range of advanced internet protocol (IP) equipment. Here, prospects are mouth-watering, as evidenced by recent successes with telecoms vendors Alcatel-Lucent and Motorola.

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Paul gained a degree in electrical engineering and went on to qualify as a chartered management accountant. He has extensive corporate finance and investment experience and is a member of the Securities Institute.

Over the past 16 years Paul has held top-level financial management and M&A roles for blue-chip companies such as O2, GKN and Unilever. He is now director of his own capital investment and consultancy firm, PMH Capital Limited.

Paul is an expert at analysing companies in new, fast-growing markets, and is an extremely shrewd stock-picker.