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Oct
24
Post-takeover, the return for a past Investorfile stock pick is still rising
Posted by: Gerry Wimmer
10/24/2021
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Up 96% in value, receiving stock in Lantronix is proving to be a big bonus for former shareholders of Intrinsyc Technologies.

In January of 2020, Lantronix Inc. finalized its takeover of Intrinsyc Technologies Corp., which was once a Top Idea for Investorfile when it was listed on the TSX (See: Intrinsyc Technologies: A high-tech turnaround play, for small cap value investors). Lantronix paid Instrinsyc shareholders US$0.55 cash per share and exchange 0.2135 of a share of the common stock of Lantronix for each issued and outstanding share of Intrinsyc Technologies.

As a result of this takeover, shareholders of Intrinsyc received the equivalent of about C$1.90 per share based on the date for the receipt of cash and Lantronix stock. On closing, this translated in to a return of about 153% since the date Investorfile first recommended Intrinsyc Technologies’ stock as a small cap value investment (it was then trading at C$0.75 per share).

While earning a 153% return on an investment is excellent, we thought there could be still more upside left on the table by continuing to hold the stock received in Lantronix. Investorfile documented that opinion in its blog post last year (See: The takeover of Intrinsyc Technologies may be the gift that keeps on giving). In hindsight, we were right. Since the takeover, the stock price of Lantronix is up significantly.

Our opinion on the further upside potential was based on the expected synergies from joining Intrinsyc and Lantronix together, by becoming part of a bigger company and the NASDAQ listing which attracts more US institutional investors so the stock can trade at a higher valuation level. Since Lantronix’s purchase of Intrinsyc, it has made several other acquisitions, too.

Today, Lantronix Inc. (NASDAQ: LTRX – US$7.36) describes itself as A global provider of secure turnkey solutions for the Internet of Things (IoT) and Remote Environment Management (REM), offering Software as a Service (SaaS), connectivity services, engineering services and intelligent hardware. Lantronix says it enables its customers to accelerate time to market and increase operational up-time and efficiency by providing reliable, secure and connected Intelligent Edge IoT and Remote Management Gateway solutions.

Because the Investorfile blog is focused on growth stocks listed on Canadian exchanges, we do not cover Lantronix today. That said we are still optimistic that there is still more upside potential by continuing to hold this stock for greater gains. We note, as of today, US research investment analysts have 12-month targets for Lantronix’s stock price as high as US$10 and US$11 per share.

Since the date of closing of the takeover of Intrinsyc Technologies, Lantronix’s stock price is up 96% in value.

For the former shareholders of Intrinsyc, who today now own shares in Lantronix, we can confirm now that "it is” the gift that keeps on giving!

Author’s share ownership disclosure: LTRX – 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 Lantronix, Inc. nor has it received any compensation from Lantronix, Inc for the preparation or distribution of this article.

The author of this article has acquired and may trade shares of Lantronix, Inc 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.