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Oct
16
Intrinsyc Technologies is only at the beginning of its bull run
Posted by: Gerry Wimmer
10/16/2016
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TOP IDEAS: Up 127%, the stock price is primed to go higher as small cap investors pay more attention to Intrinsyc Technologies (TSX: ITC).




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 community.


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 product.

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 commercial production.

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:

  1. 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.
  2. Intrinsyc Technologies' market capitalization is rising at $35 million but still small to attract the majority of small cap institutional investors.
  3. The investment community is slow in understanding the Company’s new business model, which has significant upside potential and recurring revenues.

So what will attract small cap investors to Intrinsyc and drive the stock price to higher levels?

Here are some reasons:

  1. 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.
  2. 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.
  3. 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


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.