 TOP IDEAS: Early evidence of revenue growth has technology analysts starting to take notice of Intrinsyc Technologies'
(TSX: ITC) potential in 2016.
We caught up with the senior management
team of Intrinsyc Technologies Corp. (TSX: ITC - $0.97) at The Canadian Innovation Exchange (CIX) Public Investor
Day, held in Toronto in November. The Company was selected by CIX as one of the Top
20 most innovative public companies in Canada. This
event brought together top technology companies from across Canada with institutional investors, investment
analysts, brokers and high net worth retail investors to showcase the wide
range of innovation happening across Canada. Each CEO of the Top 20 was
given seven minutes to present his/her company and its innovation to the
investors and analysts in the audience.
Hearing all the
presentations at CIX Investor Day, it was evident that among the Top 20,
Intrinsyc was in the minority. Yes, Intrinsyc is a very innovative company like
the other presenters, but it is also already profitable.
Earlier this month Intrinsyc Technologies
released Q3 results for 2015. For the quarter, the Company reported adjusted
Earnings before Interest, Taxes, Deprecation and Amortization (EBITDA) of US
$324,000. This was the eighth consecutive quarter of positive earnings. The
trend in earnings comes as no surprise, as Intrinsyc’s revenues continue to
climb, up 25% to US $3.4 million in Q3.
Intrinsyc Technologies is a product
development company in the high technology space that provides comprehensive
and tailored solutions that enable the development and production of
next-generation intelligent connected and Internet-of-Things (IoT) devices.
Solutions span the development life cycle from concept to production and help
device makers and technology suppliers create compelling 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 system on modules
(SOM) with Qualcomm processors. These become embedded systems that drive the
dedicated functions for the newest high-tech
products in areas such as connected cameras, augmented reality, drones
and robotics, to name just a few.
The biggest
takeaway from Intrinsyc’s presentation at the CIX event was the explanation of
the Company’s new "share-in” business model. Intrinsyc now shares in the
success of its customers
whose high-tech products make the transition from development to
commercialization. At this point revenues for the Intrinsyc really ramp up from
the production of large quantities of computer modules and/or through the
earning of design royalties.
There is evidence that several of
Intrinsyc's customers are entering the production phase. This month the Company
announced its largest (to date) purchase order for Intrinsyc’s Open-Q SOM,
valued at US $737,500. This is a repeat order from a previously announced
client and represents the planned deliveries beginning in 2016. Future orders
are expected from this client too. Last week, the Company announced additional
design and development agreements and a supply agreement with a production
order for Intrinsyc's Open-Q 805 SOM. Together the agreements and orders exceed
US $1 million in value.
The recent news of orders has
awakened the investment community. We understand that during the week of the
CIX event several technology analysts from investment houses in Toronto had requested and
met with the Company’s Management. This is a strong signal that Intrinsyc’s
stock is on the radar screen for new investors.
The Company’s stock is up 29% since this
blog introduced Intrinsyc Technologies as one of Investorfile’s Top Ideas (See: Intrinsyc Technologies: A high-tech turnaround play,
for small cap value investors). Since the release of quarterly financial
results we continue to reiterate that small cap investors should accumulate the
shares of Intrinsyc Technologies up to a price of CAD $1.20. But given the
Company’s outlook, we firmly believe that the stock price of Intrinsyc could
surpass our target price in 2016 as the interest from the investment community
gains momentum.
That said, there is still a significant
upside opportunity for small cap investors by purchasing the shares of
Intrinsyc Technologies at its current trading levels.
The Company has approximately 20.7 million shares
outstanding.
Intrinsyc Technologies website: www.intrinsyc.com.
Author’s share ownership
disclosure: ITC - Yes
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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. |
