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Is Panorama Synergy Limited the next hot ASX stock?

Shares in small cap Panorama Synergy Limited (ASX: PSY) have bounced up 10% at lunchtime trading today.

Over the past 12 months, Panorama shares have soared 4,775%, firmly placing Liquefied Natural Gas Limited’s (ASX: LNG) 1,433% gain in the shade.

So what’s all the fuss about?

Well, Panorama is developing what it calls LumiMEMS, an optical readout system for MEMS, or microelectromechancial systems. MEMs are tiny sensing and switching devices that can be embedded in virtually anything such as car windscreens to measure rainfall, and can be highly sensitive such as picking up traces of lung cancer on your breath.

They have been in use for decades, but over the past five years, the MEMS industry has been growing at between 10 and 20%, and is currently a $17 billion industry, according to Panorama.

The company’s LumiMEMS reader can be integrated with all existing MEMS devices, and can read multiple sensors on a single chip. Current MEMS readers are limited to around 10 sensors, but LumiMEMS has the ability to read up to 300 – a massive improvement over existing technologies.

There is also a widespread belief that MEMS are going to be a massive growth sector in the near future and beyond. Panorama says it expects MEMS have the potential to completely transform areas such as medicine – with portable, non-invasive, point-of-care diagnostic machines that will all but remove the need for an offsite lab.

That shapes up as a massive threat to traditional health care – and that’s just one industry.

As the company says,”Every device in the world is being connected to the internet, and every connected device will have multiple MEMS sensors.”

While Panorama is yet to become profitable, it is focused on commercialising the LumiMEMS Reader, enter into licencing deals with initial customers and commercial production and sale of devices incorporating the reader to mass market.

This is one company Foolish investors might want to keep an eye on.

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Motley Fool writer/analyst Mike King doesn't own shares in any companies mentioned. You can follow Mike on Twitter @TMFKinga