Intricon Corporation (NASDAQ: IIN) is up more than 223% in the past year. For a small firm with a $170 million market cap, that’s a pretty impressive move.

And the thing is, it’s still only trading at 2.26 price to sales ratio.

After a big move like that, you would expect a small cap like this to be overvalued.

But it’s still trading at a decent valuation.

Its most recent earnings release was just as impressive as its 2017 annual report.

And a couple of weeks ago, Stifel initiated coverage of IIN saying, it’s “one of the more interesting and undiscovered small-cap names.”

That helped send IIN stock up 50% in the past month.

Understanding IIN as a Company

So, what does this med tech firm actually do?

Nothing particularly sexy, but certainly something highly desirable. It makes small wearable medical devices smaller and better. Its 2 key markets are hearing aids and continuous glucose monitors.

Both these markets are becoming increasingly robust as baby boomers start to age. IIN is expanding its role in the direct to consumer hearing aid market, snapping up competitors and upgrading to its line of products.

Bypassing retail stores or medical offices means IIN can keep more of the profits and also offer devices at more compelling prices.

IIN had a 20% stake in Hearing Help Express until December, when it bought the remaining 80% of the company. Its small stake was showing very impressive sales growth, and buying it allowed IIN to see how Hearing Help Express ran its organization.

Now, it is taking over the shop and expects growth to continue at a strong pace for many quarters to come.

IIN Is Poised to Seize a Large Share of an Exploding Market

Intricon’s other big product is a 24-hour glucose monitoring device that it sells to Medtronic PLC (NYSE: MDT) for its monitoring system.

Diabetes is one of the biggest health challenges in the US today. And many older Americans are getting diagnosed with Type 2 diabetes, which has follow-on risks for heart disease and other circulatory problems.

Generally, unless patients start to eat healthier and exercise regularly, diabetes continues to worsen with age to the point where the body can’t control its production or absorption of insulin on its own.

By having 24-hour glucose monitors patients and doctors can better monitor these changes. These monitors used to be big and cumbersome devices, but MDT and IIN have made them much more unobtrusive, which helps diabetes patients maintain a normal lifestyle.

As one of the fastest growing diseases in the population, this is a major growth avenue for IIN, especially because of its partnership with MDT. Right now, MDT has 81% of the monitor market, so IIN is in a fast lane for growth.

IIN Earnings

IIN’s recent earnings only support the idea of a company on the rise. Revenue of $25.4 million was a record for the company and a 19.6% over the year ago quarter. Earnings-per-share of 10 cents obliterated the 2 cents expected — especially when investors take into account the 4 cent loss a year ago.

Since the company reported May 7, shares are up more than 16%.

— Louis Navellier

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Source: Investor Place