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Mar
27
Intrinsyc Technologies is on course to be a big win for small cap investors
Posted by: Gerry Wimmer
3/27/2016
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TOP IDEAS: Intrinsyc Technologies’ (TSX: ITC) financial results and share price are gaining rapid momentum. The stock is up 96% - Investorfile’s target reached. 





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.
Last week the shares of Intrinsyc Technologies Corp. (TSX: ITC - $1.47) surpassed our stock price accumulation target at $1.20. The Company’s shares have increased in value by 96% since our buy recommendation was posted to our list of Investorfile Top Ideas – Small Cap Value Stocks in October of 2014 at $0.75 (See: Intrinsyc Technologies: A high-tech turnaround play, for small cap value investors.) 

Though still largely overlooked by the investment community, Intrinsyc Technologies' stock price and liquidity are gaining upward momentum. More importantly, the Company’s business operations are doing the same.

Intrinsyc Technologies has achieved some rapid growth in revenues and profits. The Company reported its fourth quarter and year-end financial results for 2015. The positive results were not a surprise but, nevertheless, the magnitudes of financial gains were impressive. Revenues for Q4 grew 57% to US$4 million, achieving adjusted EBITDA of US$965,000 and net income US$806,000 thousand or US $0.04 per share in earnings. Intrinsyc turned significantly profitable in 2015 on annual revenues of US$12.5 million. The Company reports all of its financial results in US currency (Intrinsyc’s stock is quoted and traded on the TSX in Canadian dollars).

Intrinsyc Technologies provides solutions that span the development life cycle from concept to production to help high–tech device makers (original equipment manufacturers – OEMs) with the ability to offer 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 modules with Qualcomm processors, which then become embedded systems that drive the dedicated functions for new high-tech products in markets including Internet of Things, smart phones and tablets, drones and robotics, wearable security cameras, in-flight entertainment, auto console computers plus many more.
 
The revenue model for Intrinsyc includes the sales of its proprietary computer modules and development kits, as well as engineering services related to those modules and kits for the creation of new products. Revenues really begin to ramp up for the Company from computer modules sales and/or design royalties tied to the OEM’s (Intrinsyc customers) new product sales when they mature in the cycle to the production stage. Currently the Company provides engineering services to about 25 customers. Last count, six of those customers have recently entered into the commercial production phase for their new products.
 
Intrinsyc’s business is still at the early stages of a major expansion cycle. This will lead to higher earnings and therefore higher stock prices when the Company reports financial results in the coming years. Of note, recent customer demands have driven Intrinsyc to hire additional software and hardware engineers plus expand operations with Engineering Centers in Boulder, Colorado and Taipei, Taiwan to supplement its Vancouver base. 
 
We acknowledge Intrinsyc shares have raced passed our stock price target. But, as said in previous blog posts, it has always been our view that this stock would likely eclipse our conservative price target, as the Company executes on its growth strategy. 

The big upside potential for this stock still exist. As the market capitalization of this Company grows institutional small cap funds will start accumulating its shares. When this occurs, all bets are off on how high Intrinsyc Technologies’ stock price could go.
 
The Company has approximately 20.7 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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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.