IntriCon (IIN) – Small Cap Medical, Big Growth
It pays to do fundamental research. This bullish view on IntriCon (IIN) was presented in the JaguarLive chat room on May 24. We recommended buying common stock at $31.35, and IIN has jumped to $60 on July 27 (+91% gain). To learn more about our approach and how you can become a successful trader, sign up for a 4-week trial and test drive the JaguarLive chat room with some of the best traders: SUBSCRIBE
May 24, 2018
IntriCon (IIN) – A powerful chart that I discussed first time on May 7 after company posted a fabulous quarter. An under the radar stock under heavy accumulation looking at high volume bars. Really starting to like the story here, but unfortunately stock doesn’t have options.
Stifel research just posted a bullish view after Medtronics (MDT) posted a strong quarter and that stock is breaking out. Note IIN sales to MDT represents 48% of total revenues and 81% of IIN’s Medical segment revenues with 100% Medical segment growth attributed to MDT. Stifel points out:
“Today’s Medtronic Diabetes division results (+21.3% YoY organic growth) are evidence that 670G momentum continues, with strong uptake of 670G in Medtronic’s April quarter, and increased sensor attachment rates as Medtronic’s customer base shifts to sensor- augmented systems from standalone pumps.”
Stifel points out MDT benefited from robust demand of MiniMed 670G system in which installed base increased sharply to 70K users, sharp sequential acceleration from 20K in prior quarter. 100% of 670G systems sold include a transmitter which is made by IIN. Note IIN in Q1 posted +19.6% revenue growth and now MDT is posting +21.3% organic growth of diabetes division. This tells me that IIN growth in Q2 has sequentially accelerated.
Chart below shows the relationship between MDT Diabetes and IIN Business with high correlation, aside from two quarters when MDT ran into sensor manufacturing issues which is now corrected.
I like buying IIN common here at $31.35 or less. I understand that stock may appear overbought a bit, but this is only $211 million small cap. Off the radar with $115 billion giant like MDT providing support.
