|TOP IDEAS: It may be time for small cap investors to jump
on the Intrinsyc Technologies Corp. (TSX: ITC) growth train before it leaves
Intrinsyc Technologies provides solutions that span the
development life cycle from concept to production to help high–tech device
makers (original equipment manufacturers – OEMs) with the ability to offer
compelling differentiated products with faster time to market. As a Qualcomm
licensee and a leader in Qualcomm® Snapdragon™ product development programs for
the Snapdragon family of mobile processors, Intrinsyc designs proprietary
computer modules with Qualcomm processors which become embedded systems that
drive the dedicated functions for new high-tech products.
The revenue model for Intrinsyc includes the sales of its
proprietary computer modules and development kits, as well as engineering
services related to those modules and kits for the creation of new products.
Revenues really begin to ramp up for the Company from computer modules sales
and/or design royalties tied to the OEM’s (Intrinsyc customers) new product
sales at the commercialization stage.
Intrinsyc’s revenues are beginning to rise. For Q2 in
2015, the Company reported revenues jumped 27% from Q1 to US $2.9 million
(Intrinsyc reports financial results in US dollars). The Company earned US
$266,359 or US $0.01 per share for the quarter. In the recent investor call,
Management reported that the Company was providing new product development
services to about 30 different companies, all with emerging high-tech products poised
to be commercialized. Intrinsyc clients operate in a wide variety of vertical
markets, including: Automotive, Communications Infrastructure, Consumer
Electronics, Surveillance/Security, Industrial Control, Energy/Power, Medical,
Retail Solutions and Military/Aerospace.
A recent press release and special filing (a few days
following the Q2 report) was even more telling of the Company’s future growth
prospects. Intrinsyc Technologies reported it had received its first purchase
orders from two clients whose products are being commercialized. The two customers are expected to be significant contributors to the Company’s revenues
in 2016 with the aggregate annual unit volume of Intrinsyc's Open-Q computer
modules sales anticipated to exceed 50,000 units. We calculate that as
approximately US $7-8 million in revenues (derived from the two customers) for
Intrinsyc annually. We note that the Company also filed "material change" report to alert the investment community of the potential ramp up of its
revenues as result of this news.
We view this announcement as a strong signal of revenue
growth potential for Intrinsyc Technologies. That said the overall revenue growth is not just expected to come from the above noted clients, but from
the numerous other Intrinsyc customers whose high-tech products are in later stages of development and soon to be commercialized.
With the recent the developments, we reiterate that small
cap investors should accumulate the shares of Intrinsyc Technologies up to a
price of CDN $1.20 in advance of the Company realizing its revenue growth
The Company has approximately 20.7 million shares
Author’s share ownership disclosure: ITC - Yes
This article is for informational purposes only. This
article is based on the author's independent analysis and judgment and does not
guarantee the information's accuracy or completeness. The information contained
in this article is subject to change without notice, and the author assumes no
responsibility to update the information contained in this article. The
information contained within this article should not be construed as offering
of investment advice. Those seeking direct investment advice, should consult a
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solicitation to buy or sell securities. Readers are advised to conduct their
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The author of this article has acquired and may trade
shares of Intrinsyc Technologies Corporation through open market transactions
and for investment purposes only.