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10
Intrinsyc Technologies is on pace for record results, making it a buy today
Posted by: Gerry Wimmer
6/10/2018
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TOP IDEAS: Intrinsyc Technologies’ (TSX: ITC) order book and financials are tracking well for what should be a banner year. Investorfile reconfirms this stock as a Top Pick for 2018.




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.


Despite its lacklustre performance in 2017, this blog did not hesitate to name Intrinsyc Technologies as one of its Top Picks (among our Top Ideas) for 2018 (See: Investorfile predictions for 2017 had a 5-star performer. Will 2018 too?). That post in December 2017 held our prediction that "Intrinsyc Technologies could see revenue growth from bigger contracts in 2018.” Why? We felt that several of Intrinsyc’s customers were ready to launch on the commercial production of new products, which should lead to larger contract wins for the Company. If so, Intrinsyc would likely report significant year-over-year growth in both revenue and profits, which could be a catalyst for the stock price.

Looking back at this prediction (when the share price was C$1.27), and what has transpired since, we are reconfirming this stock as a Top Pick by Investorfile for 2018.

Intrinsyc TechnologiesCorp. (TSX: ITC - $1.54) 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.

Intrinsyc Technologies is beginning to show strong momentum in its business operations. It began with the Company’s Q4 results for fiscal 2017 (released in March of 2018). In Q4, Intrinsyc reported strong revenue growth as a result of increased shipments of embedded computing hardware to new and existing clients, as well as improvement in revenue generated from engineering services. Revenue was $US6.8 million, which was a substantial increase from the US$4.3 million in the fourth quarter of fiscal 2016.

The momentum has continued into Q1 of 2018 (which is historically a slow quarter for the Company.) Revenue in Q1 was US $6.1-million, which was a 35% increase from US $4.5-million in the first quarter of fiscal 2017. In Q1, Intrinsyc earned an adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of US $307,631 and net income of US $124,149 with earnings per share of US$0.01.

Since the release of Q1 results, Intrinsyc Technologies has also announced several large sales orders. First it was sales orders received for its embedded computing modules and product development engineering service agreements totalling US$1,877,000. Then last week, Intrinsyc Technologies announced more sales orders for its embedded computing modules valued at US$940,000. The recent order activity is a good indication that the Company’s business is doing well.

Intrinsyc's recent order activity coupled with its financial results over the last several quarters, are signals for continued strong revenue and profit growth in 2018. We feel that small cap investors should take advantage of this and buy shares before the Company reports its financial results for the coming quarters to reap the upside potential for the stock price.

The Company has been actively buying back its shares and last reported has only about 20.9 million shares outstanding.

Intrinsyc Technologies maintains a healthy balance sheet.

Note: This year Management of Intrinsyc Technologies will make a presentation about the Company at The MicroCap Conference to be held in downtown Toronto on June 21, 2018. At this conference Management will also be available for scheduled one-on-one meetings. The MicroCap Conference is free to attend to qualified registered investors. To register visit: www.microcapconf.com/toronto/.

Company 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.