TOP IDEAS: Up 127%, the stock price is primed to go higher
as small cap investors pay more attention to Intrinsyc Technologies (TSX:
Investorfile's share price accumulation target of $1.20 for
Intrinsyc Technologies Corp. was reached on March 21, 2016. For the record, we
do not revise share price targets for our Investorfile Top Ideas – Small Cap
Value Stocks. We have positioned our blog to be one of the first providers of a
pragmatic perspective of a small cap company stock's potential worth, where
there may be uncovered value that has been largely overlooked by the investment
There is no doubt that the Investorfile blog believes that
small cap investors (both retail and institutional) should pay more attention
to the growth story occurring at Intrinsyc Technologies Corp. (TSX: ITC - C$1.70).
Yes, it's true: The Company’s share price and liquidity is gaining some
upward momentum, but we feel this is only the very beginning of this stock’s
bull-run, making it one of our most compelling Top Ideas.
Intrinsyc Technologies provides solutions that span a
product's development life cycle from concept to production. Intrinsyc services
high–tech device makers (original equipment manufacturers – OEMs) with the
ability to offer 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 then
become embedded systems that drive the dedicated functions for
new high-tech products in markets including the Internet of Things, smart
phones and tablets, drones and robotics, wearable security cameras, in-flight
entertainment, auto console computers, plus many more.
The Company has a developed unique revenue model.
First,sales are derived from proprietary computer modules and development
kits, as well as high-margin engineering services related to those modules and
kits for an OEM product development program. As their OEM customers’ new
products gain market acceptance, Intrinsyc shares in the commercial success by
earning recurring revenues from computer modules sales and/or design royalties
in correlation with the production ramp-up over the lifetime of the high-tech
Intrinsyc’s revenue model is proving to be a very profitable
growth story.Last quarter (Q2-2016), the Company’s revenues increased by
68% over the prior year (sequential growth of 12%) to US$4.8 million
with net Income of US$599,868 and earnings per share of US$0.03. Over 40% of
revenues were tied to computer module hardware sales, mostly for
commercial production.The Company reported net income of US$1,090,606 on
revenues of US$9.1 million (up 77%) in the first six months of 2016.
Intrinsyc’s operating currency is US dollars.
As of June 30, 2016, the Company had reported that about 30
high-tech OEMs are currently incorporating Intrinsyc's Open-Q™ embedded
computing modules into their products. Eight of those products are now in
Intrinsyc Technologies' share price is up 127% from the day
we first recommended the Company’s stock (See: Intrinsyc Technologies: A
high-tech turnaround play, for small cap value investors.) But, in our view,
this stock is still under-followed and therefore undervalued.
Some reasons why:
- The Company has plenty of cash, is debt-free, generates
good cash flow and therefore requires no capital at this time. Small cap
analysts first gravitate to cover companies that require capital in order to
generate financing fees for their employers, the investment houses.
- Intrinsyc Technologies' market capitalization is rising
at $35 million but still small to attract the majority of small cap
- The investment community is slow in understanding the
Company’s new business model, which has significant upside potential and
So what will attract small cap investors to Intrinsyc and
drive the stock price to higher levels?
Here are some reasons:
- As Intrinsyc Technologies continues to grow, over time
the market will recognize the operating performance of this Company and true
value will surface. It always does.
- When this Company’s market capitalization nears $50
million it will attract the first wave of small cap institutional investors,
which could have a profound impact on Intrinsyc’s stock valuation.
- Intrinsyc Technologies has only 20.7 million shares
outstanding. A small share float can cause rapid upward pressure on a share
price when the stock is in demand.
Our conclusion: Despite the increase in the value of
Intrinsyc Technologies shares to date, the Company is still under-followed and
therefore the appreciation potential for the stock price is still stronger than
ever. Based on Intrinsyc’s financial results and outlook to date, we encourage
investing in unrecognized value ...... while it lasts.
Intrinsyc website: www.intrinsyc.com
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
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.