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