Intouch Insight Ltd (OTC:INXSF)

Added To Our Long INXSF Position

We recently added Intouch Insight Ltd (OTC:INXSF) to our 8th Buy on Pullback Model Portfolio as shares have come down due to business disruptions from COVID-19. Yesterday, we added to our long position as we feel the impact will be temporary and are very bullish on the long term prospects for the Company. We are also adding the stock to our Favorite Model Portfolio. 

We have been  tracking and researching INXSF since February 2020 when we added the stock  to our Run to One Model Portfolio and disclosed a long position in the stock at around $0.49.  

The company sells mobile software applications and software-as-a-service platforms to measure customer experience, monitor regulatory compliance and monitor field operations. A good deal of the company’s customers are retailers and from the hospitality industry - obviously, many of which had to shut down or limit operations due to COVID-19. Thus, the stock has fallen sharply since the onset of COVID-19.  

However, we see only a remote risk of its customers going out of business since most of them are large, well established firms as opposed to small “mom and pop” businesses. Ironically, moving forward, retailers and restaurants are probably going to be more motivated to track the consumer behavior of their customers, as well as make sure that locations adhere to social distancing rules. The company is also increasing its on-line customer experience survey activities. 

Our main concern had been that the COVID-19 lockdown would last several months, putting stress on the company’s balance sheet and customer operations. However, with states slowly re-opening, and a stronger financial outing for Q1 2020 than we anticipated, we think the company’s financials could bottom in Q2 and then gradually improve. Although INXSF’s recovery could take time, we believe that the current price is the right bet at the right price, something we echoed in a recent virtual presentation pitch we gave in April 2020. We could see ourselves continuing to add shares at current prices. 

You can see our full coverage on INXSF here, including a video breakdown of how COVID-19 could impact the business,