I don’t allocate a lot of capital to penny stocks. Because they tend to be risky investments.

However, occasionally I spot an opportunity that’s really tempting. And MTI Wireless Edge (LSE: MWE) is one of those opportunities.

Winning defence deals

MTI Wireless Edge is a small Israel-based company that designs and manufactures state-of-the-art antennas and related systems. It makes products for a broad range of markets but where it’s having a lot of success at the moment is on the military front.

We can see this in a trading update posted this morning (7 April). Here, it advised that it has recently won a bunch of new defence orders (all from existing customers) including:

• A $2.2m contract to supply communications infrastructure to the Israeli Ministry of Defence
• A $1.9m contract to supply military antennas to an international defence company
• A $0.5m contract for military antennas from a local defence company
• Additional orders totaling approximately $1.3m to supply components primarily to a defence company

Put all these together and we have $6m worth of contracts. Not bad for a company with a market cap of just over £50m.

The market is clearly impressed – the company’s share price is up about 8% as I write. That takes the stock’s year-to-date gain to around 33% – miles ahead of the returns from some bigger defence stocks such as Rolls-Royce Holdings (3%) and Rheinmetall (0%).

An investment opportunity?

Is this penny stock worth a look today? I think so – it appears to offer a winning combination of growth, value, momentum, and income.

We can see the growth in the deals above. These should boost the company’s top line.

“The volume of orders significantly enhances our order book for FY2026 and FY2027 and supports our ability to continue to grow our business.”
MTI Wireless Edge CEO Moni Borovitz

As for value, the forward-looking price-to-earnings (P/E) ratio is only about 14. That earnings multiple suggests to me that this stock is flying under the radar of a lot of investors.

Turning to momentum, the share price is in a strong upward trend. And ‘the trend is your friend’ as they say.

We also have income. For 2025, this company paid out 3.4 cents in dividends per share – that translates to a dividend yield of about 4.2% today.

Of course, we need to remember that this is a penny stock. And that means that there are plenty of risks. It’s also in a sector in which many investors wouldn’t want to invest.

On the operational front, risks include deals drying up and revenue growth stalling and higher supply chain costs eating into profits. Meanwhile, on the trading/investment front, a risk is a lack of liquidity (not being able to sell the shares at a good price).

Overall though, I like the risk/reward set-up at the current share price valuation and valuation. I believe this stock is worthy of further research.