PALO ALTO, CA / ACCESSWIRE / April 4, 2017 / The Silicon Valley Insider (or "SVI"), an investment newsletter focused on uncovering paradigm-shifting tech stocks and showcasing their potential to both new and experienced investors, would like to alert traders to some exciting new opportunities in the rapidly-growing Internet of Things (or "IoT") space.
Primary companies mentioned: GTX Corp. (OTC PINK: GTXO), Internet of Things (TSX-V: ITT), Imagination Park Entertainment (CSE: IP), Intrinsyc Technologies (TSX: ITC)
2017 appears to be off to a great start with the S&P 500 having gained roughly 3% over the past month and the Dow Jones 30 finally breaking above the 20,000 mark. The Technology SPDR (NYSE: XLK) on the other hand has risen by roughly 7.3% during the same period (almost double the broader indexes) signaling that the momentum in tech stocks witnessed in the past year isn't close to dying down.
A great example is Nvidia (NASDAQ: NVDA) which happened to be the best performing stock in the entire S&P 500, not just among tech stocks. The company's shares gained an impressive 220% in 2016 after etching itself a spot in the autonomous driving segment following its announcement of the partnership with both Baidu, Inc. (NASDAQ: BIDU) and Tesla, Inc. (NASDAQ: TSLA). The company's server GPUs are also increasingly being used to handle artificial intelligence workloads by cloud companies like Amazon, Inc. (NASDAQ: AMZN) and Facebook, Inc. (NASDAQ: FB).
While the more established mature tech companies have been receiving the bulk of investors' attention, we believe that this has led to most of them missing out on opportunities to realize above average gains when compared to their small cap counterparts.
One tech stock to be on the lookout for goes by the name GTX Corp (OTC: GTXO). This company's current market valuation is approximately $5 million but this number could probably increase exponentially as a number of catalysts come into play. To start with, the company describes itself as a pioneer in the GPS wearable tech market where it leverages its patented, miniaturized and low power consumption GPS and cellular tracking and monitoring technology as the foundation of its two-way GPS personal location based services.
One of its products is the patented GPS SmartSole® which we expect will be driving the company's growth in the long-term. This technology sits invisibly inside a piece of footwear and allows for the real-time tracking of patients who have the tendency to wander such as those with Alzheimer's, Dementia and Autism.
It's important to note that the addressable market here is huge. It's estimated that about 2% of the population is living with the aforementioned conditions including other cognitive disorders that usually result in wandering because of memory loss. And this product is sold with a monthly or quarterly subscription plan, which generates high margin recurring revenues. According to the company's FY 2015 annual report, revenue surged 225% and this growth continues.
Due to the scarce coverage of GTXO in mainstream media, some investors may not be aware of the extent of its patent portfolio, hence missing a critical piece of information that nicely ties up the company's investment thesis. Just recently, GTXO signed a deal with Inventergy Global (NASDAQ: INVT) to monetize 3 of its patents which are applicable to remotely configurable tracking and location devices including smartphones and other GPS based products that are in use today and will be even more heavily deployed in the future as the wearable market grows. Collectively, this represents a very sizable addressable market. Shares of the company have gained more than 300% since January lows, however we feel that based on its patent portfolio, the size of their target market and the continued sales growth of SmartSoles®, the shares are still undervalued especially when compared to Analysts price targets of $0.10 (900% higher than March 23rd's closing price).
Internet of Things (TSX-V: ITT), just as its name suggests, is an Internet of Things (IoT) software and solutions provider with a focus on industrial IoT markets including agriculture, manufacturing, energy management and transportation. The company has a current market capitalization of $15.27 million and also has a number of developing catalysts that could push its share price higher.
But before looking at these catalysts the IoT opportunity needs to be put into better context. By 2020 there will be 50 billion connected devices globally with an estimated economic impact of more than $14 trillion. The global investment in industrial IoT will reach $60 trillion by 2030 with over 50 billion assets (machines, equipment, turbines, rolling stock etc.) connected to the internet. In essence, through the adoption of IoT companies we will be able to gain deeper operational insight which will enhance productivity, create new business models and generate new revenue streams. Also, IoT is expected to be a major force for industrial economic growth in China, delivering gains of up to $1.8 trillion in cumulative GDP by 2030.
ITT's joint venture with BrainGrid to market, sell and distribute BrainGrid's Sentroller product and related IoT technology applications in markets such as China, Taiwan and Hong Kong could be the company's biggest growth catalyst going forward. The Sentroller platform easily enables remotely monitoring and management of systems and in field equipment. Since businesses are in the early stages of mass adoption of IoT solutions, we expect this to be another important catalyst for ITT going forward.
Another tech company that warrants investors' close attention is Imagination Park Entertainment (CSE: IP). IP is an entertainment company that incubates, accelerates and produces both feature film and 360 degree, 3D virtual reality content. The company also assists film makers in the budgeting, packaging, marketing, financing, release and distribution of their films. Although IP isn't yet profitable, the top line has been steadily growing. Its shares have been on a massive rally gaining more than 100 percent in the past month alone.
This couldn't be a clearer reaffirmation of investors having realized the massive opportunity here. According to Transparency Market Research, the global VR content creation market is likely to exhibit a CAGR of 89.8 percent between 2016 and 2014. At this pace, the market is expected to reach a whopping $41.01 billion by the end of 2024 from a valuation of $147.5 million in 2015.
Last but not least is Intrinsyc Technologies (TSX: ITC), another high performing tech stock. Last year, the company's shares gained about 124 percent making it one of the best performing companies on the Canadian markets. ITC announced first quarter revenue growth that was 90 percent higher than the year before. The company is engaged primarily in the design, development and build of IoT products with a great business and healthy gross margin of 25 on repeat production hardware which is better than the industry average.
During ITC's most recent quarterly earnings release CEO, Tracy Rees suggested that there is way more to come: "The Company enjoyed record order bookings, led by record hardware orders, and ended the quarter with an increased order backlog in both product development services and hardware," Rees said.
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