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Nov
29
Intrinsyc Technologies results and outlook show more than a promise
Posted by: Gerry Wimmer
11/29/2015
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TOP IDEAS: Early evidence of revenue growth has technology analysts starting to take notice of Intrinsyc Technologies' (TSX: ITC) potential in 2016.



We caught up with the senior management team of Intrinsyc Technologies Corp. (TSX: ITC - $0.97) at The Canadian Innovation Exchange (CIX) Public Investor Day, held in Toronto in November. The Company was selected by CIX as one of the Top 20 most innovative public companies in Canada. This event brought together top technology companies from across Canada with institutional investors, investment analysts, brokers and high net worth retail investors to showcase the wide range of innovation happening across Canada. Each CEO of the Top 20 was given seven minutes to present his/her company and its innovation to the investors and analysts in the audience.

Hearing all the presentations at CIX Investor Day, it was evident that among the Top 20, Intrinsyc was in the minority. Yes, Intrinsyc is a very innovative company like the other presenters, but it is also already profitable.

Earlier this month Intrinsyc Technologies released Q3 results for 2015. For the quarter, the Company reported adjusted Earnings before Interest, Taxes, Deprecation and Amortization (EBITDA) of US $324,000. This was the eighth consecutive quarter of positive earnings. The trend in earnings comes as no surprise, as Intrinsyc’s revenues continue to climb, up 25% to US $3.4 million in Q3.

Intrinsyc Technologies is a product development company in the high technology space that provides comprehensive and tailored solutions that enable the development and production of next-generation intelligent connected and Internet-of-Things (IoT) devices. Solutions span the development life cycle from concept to production and help device makers and technology suppliers create 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 system on modules (SOM) with Qualcomm processors. These become embedded systems that drive the dedicated functions for the newest high-tech products in areas such as connected cameras, augmented reality, drones and robotics, to name just a few.

The biggest takeaway from Intrinsyc’s presentation at the CIX event was the explanation of the Company’s new "share-in” business model. Intrinsyc now shares in the success of its customers whose high-tech products make the transition from development to commercialization. At this point revenues for the Intrinsyc really ramp up from the production of large quantities of computer modules and/or through the earning of design royalties.

There is evidence that several of Intrinsyc's customers are entering the production phase. This month the Company announced its largest (to date) purchase order for Intrinsyc’s Open-Q SOM, valued at US $737,500. This is a repeat order from a previously announced client and represents the planned deliveries beginning in 2016. Future orders are expected from this client too. Last week, the Company announced additional design and development agreements and a supply agreement with a production order for Intrinsyc's Open-Q 805 SOM. Together the agreements and orders exceed US $1 million in value.

The recent news of orders has awakened the investment community. We understand that during the week of the CIX event several technology analysts from investment houses in Toronto had requested and met with the Company’s Management. This is a strong signal that Intrinsyc’s stock is on the radar screen for new investors.

The Company’s stock is up 29% since this blog introduced Intrinsyc Technologies as one of Investorfile’s Top Ideas (See: Intrinsyc Technologies: A high-tech turnaround play, for small cap value investors). Since the release of quarterly financial results we continue to reiterate that small cap investors should accumulate the shares of Intrinsyc Technologies up to a price of CAD $1.20. But given the Company’s outlook, we firmly believe that the stock price of Intrinsyc could surpass our target price in 2016 as the interest from the investment community gains momentum.

That said, there is still a significant upside opportunity for small cap investors by purchasing the shares of Intrinsyc Technologies at its current trading levels.

The Company has approximately 20.7 million shares outstanding.

Intrinsyc Technologies website: www.intrinsyc.com.

Author’s share ownership disclosure: ITC - Yes


Read Disclaimer:

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 qualified, registered, investment professional. This is not a direct or implied solicitation to buy or sell securities. Readers are advised to conduct their own due diligence prior to considering buying or selling any stock.

Investorfile.com is not engaged in an investor relations agreement with Intrinsyc Technologies Corporation nor has it received any compensation from Intrinsyc Technologies Corporation for the preparation or distribution of this article.

The author of this article has acquired and may trade shares of Intrinsyc Technologies Corporation through open market transactions and for investment purposes only.

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Hi Gerry, Your philosophy is focused on principles that have been shown to produce above average results over time and your record has clearly proven that. Congratulations on a great blog and thank you for the hard work that you do in sharing and updating your ideas; it is much appreciated.