Putting Wireless Gear In Orbit

Always on the lookout for an unrecognized star in a hot business, a number of hedge-fund managers have been buying into Electromagnetic Sciences (ELMG), which specializes in in wireless communications in worldwide markets. "It's one of the few pure plays in wireless technology that's making money and growing very rapidly," says one New York money manager.

Electromagnetic's attraction is its products. Its 70% owned, publicly traded LXE (LXEI) subsidiary, which sells at 15 a share--makes wireless data-communications systems that are radio-linked with host computers. The company's two other units--EMS Technologies and CAL Systems--make advanced communications and signal-processing electronics products used in satellite systems.

CAL is the exclusive maker of air-borne antennas for American Mobile Satellite, which were used in the MSAT satellite launched on Apr. 7. The antennas also transmit voice and data from private planes at sharply lower costs than available alternatives. In addition, Electromagnetics is using its technical knowhow to develop antennas for personal communications services (PCS). Sales of the antennas, says one pro, should boost company earnings in 1996 and 1997.

Electromagnetics, which is practically debt-free and has a healthy balance sheet, has grown rapidly: Earnings jumped in 1994 to 58c a share on sales of $117.9 million, up from 1993's 20c on sales of $99 million. One major investor thinks earnings will leap to 82c this year and to 96c in 1996. He sees the stock doubling in a year.

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