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Aug
13
It is time to buy shares of Intrinsyc Technologies again
Posted by: Gerry Wimmer
8/13/2017
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TOP IDEAS: Intrinsyc Technologies Corp. (TSX: ITC) could see very significant growth in 2018 as record sales orders impact financial results, which supports stock price appreciation potential.





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.


We admit the financial performance of Intrinsyc Technologies has been lacklustre in 2017. Revenue growth has been flat and profits are lower compared to the first six months of last year and the Company’s stock price has trended downward over the last 6 months from its 52-week trading highs.

But the Investorfile blog sees a reversal in the stock price coming, an upward trend emerging over the next 12 months, as big orders begin to positively impact the Company’s financial results.

Intrinsyc Technologies Corp. (TSX: ITC - $1.55) 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, Intrinsyc designs proprietary computer modules with Qualcomm processors. The Intrinsyc computer modules become the 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.

Intrinsyc Technologies has a revenue model that derives sales 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 its 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 new high-tech products.

Management stated in its Q2-2017 report that the Company has made excellent progress in earning additional design wins and moving its OEM clients from the product development stage into commercial production. Intrinsyc currently has built a pipeline of 42 customer products in development and 18 in commercial production. The Company says that design and production wins are important metrics to track its progress in building a business with scalable repeat revenue for the coming quarters

As such, the Company reported that it has secured a US $3 million order for memory components placed by a Global 500 OEM customer. The memory component is for a computer module (designed by Intrinsyc) that powers the OEM’s new product. The total value of the modules to be purchased by this customer is expected to reach between US $13-14 million for delivery throughout 2018 and into early 2019. The Company is also designing a new computer module to power a next-generation product for the same Global 500 customer.

The Investorfile blog views the recent business developments as a strong signal for Intrinsyc Technologies' growth potential in 2018. Though, the expected revenue growth is not just going to come from the above-noted Global 500 firm, but from numerous other Intrinsyc customers whose products are expected to head to commercial production, too.

Based on the above, we suggest that small cap investors should begin accumulating the shares of Intrinsyc Technologies again (currently while the stock price is trading at its lowest levels in the year) in advance of the Company realizing its revenue growth potential expected in 2018.

The Company has approximately 21.1 million shares outstanding.

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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Gerry: Thanks for small cap stock suggestions over the past 5-years. Your record is very impressive and your analysis has been excellent over the years. I think small investors (and fund managers) should pay much more attention to your work. I look forward reading your blog over the next 5-years!