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To
OTC Journal Members:
 |
Members' Forum
on Irvine Sensors (NASDAQ: IRSN) |
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Kent C sent in this question:
Lending Tree was an excellent
call. Good job! Do you have a list of your current still active recommendations?
Would like to review them too.
This was my answer:
Right now I love Irvine Sensors-
NASDAQ: IRSN. The stock is behaving well, and the company recently announced
a $13 million contract with the Department of Defense. Should do $20 to
$25 million in revs this fiscal year. At current price (about $1.65) only
$16 million market capitalization. Balance sheet is weak, but the stock
is down from a previous high of $365 per share and the company is experiencing
the highest revenue run rate in its 20 history as a public company. Take
a look at Irvine Sensors.
Kent C Replied:
Technically this stock went into
an accumulation base on Oct 5 2001 and has built a huge base. A strong
close with wide range and heavy volume above 1.76 signals 2.60. Buying
under 1.50 with a protective stop close only at 1.19 seems reasonable.
I have proprietary software to base this analysis. Thank you.
The purpose of today's newsletter
is to encourage you to take a look at Irvine Sensors if you haven't
done so already or don't own the stock. I believe the company is on the
brink of achieving far more than they ever have in their 20 year history,
and with the stock still trading at historically low market valuations
there is plenty of room for upside.
Here's the technical picture:
Kent C is undoubtedly looking at
the stock's attempt to get through the $1.75 level, which it has already
tried for three times since making the $2.40 intraday high back in December.
He hypothesizes it is highly likely
this $1.75 barrier will erode. Like the surf pounding a cliff, the continuous
action of the water against the rock will eventually lead to a collapse
of resistance.
Kent C believes once this barrier
falls, the stock has a good chance of climbing back towards its previous
52 week recent high. I agree.
A critical technical factor which
helps complete the picture is the recent resurgence in volume. Since the
company announced the $13 million development with the Department of Defense
back on April 23rd, the average daily volume has increased considerably.
In the 4th quarter of 2002 the average daily volume of IRSN was
about 30,000 shares per day. The 150 day average daily volume is now 52,000
shares per day. The 20 day average daily volume has risen to 140,000 shares
per day, up 450% from last year's levels.
This means there is a serious resurgence
of interest in this company from investors. Therefore, any further positive
fundamental developments could translate into more significant movements
in price.
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The
Fundamental Side |
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Irvine Sensors has a fiscal
year which ends at the end of September. During fiscal 1998 through 2001
the company achieved about $10 million in annual sales each year, and lost
money each year.
In fiscal 2002, Irvine Sensors
achieved
$15 million in sales, up 50% from the previous year. Losses continued.
In fiscal 2003 the company will probably
achieve over $20 million in sales. The $13 million development contract
with the DOD was delayed by about 2 months which put the company off track
and led to a weak March quarter, but the year can easily be salvaged over
the remaining five months.
Over the past 20 years, Irvine
Sensors has invested over $200 million in its proprietary technology
and holds over 50 patents. Many consider the company the leader in "Chip
Stacking" technology. This is a method for bonding computer chips together
in such a way that the speed and power is magnified dramatically.
Their chip stacking technology provides
much greater processing power in a smaller space using less power. Hence,
as it turns out, their technology is perfectly suited for use in the 21st
Century's new generation of high tech weaponry. This explains the increase
in moneys earmarked for development projects with the Department of Defense.
Profitability could come in the June
and September quarters. With the stock trading at less than one times annual
sales, down from a year 2000 high of $365 per share, there is plenty of
room for further upside in the stock. In my opinion, this stock should
be in your speculative portfolio right now.
Charts Provided Courtesy
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