SYNC

[David Randolph]

Here's the profile of the company:

Intellisync Corporation (SYNC) Formerly known as Pumatech, Inc.. The Group's principal activities are to develop, market and support synchronization, mobile-application development and mobile-application management or device management software. The software products allow the exchange and synchronization of data across diverse platforms, operating systems and applications. This software enables consumers, business professionals and information technology professionals to extend the capabilities of enterprise groupware and vertical applications, handheld organizers or computers, Web-enabled mobile phones, pagers and other wireless or wireline personal communications platforms. The Group offers the products to original equipment manufacturers, enterprise, retail and online markets. On 01-Mar-2005, the Group acquired Tourmaline Networks, Inc.

The company just reported 4th quarter results (why don't they all end the year at the end of the year, as normal people do?  ), which came 1 cent better than expected:

«Shares of Intellisync Corp. (SYNC: news, chart, profile) soared 19.8% after the San Jose, Calif., mobile device management software company reported a fiscal fourth-quarter pro forma loss of $1.6 million, or 2 cents a share, a penny narrower than Wall Street's consensus estimate. Revenue rose 18% to $15.7 million from $13.3 million a year ago.)»

We have this subtitle on the press release of the company, issued on Tuesday: «Intellisync Announces Fourth Quarter Results and Record Revenue for Fiscal 2005
- Carrier Customers Fuel Growth; Q4 Revenue from Carriers Increases 85% Over Prior Quarter, Accounting For 30% of Total Q4 Revenue - Intellisync Becomes Platform-Independent Wireless Messaging Leader in FY2005; Characterized By Record Subscribers, Product Awards and Enterprise and Carrier Wins
8/30/2005 4:15:28 PM»

Seems fine ... but what is inspiring me is the confidence of the CEO, read this (and excuse me for so much copy paste on this recommendation):

"This last fiscal year has been monumental for Intellisync," said Woodson "Woody" Hobbs, Intellisync's President and Chief Executive Officer. "We established Intellisync as the leader in platform-independent wireless messaging and mobile software. We entered the carrier market full-force, winning deals with some of the top worldwide carriers, and growing carrier revenues by eight-fold for the year. We're very proud of the fact that we've penetrated the carrier market achieving substantial revenue growth with what we believe is an efficient and minimal use of our cash. We introduced new technologies that we believe will open up new markets for Intellisync and secured prestigious industry awards and industry analyst recognition. The Intellisync brand became well recognized by mobile decision-makers in big companies and carriers around the world.

"And we're just getting started," Hobbs added. "The markets that we serve are growing rapidly and we believe we are at the beginning of a new growth stage in the mobile software industry. Our success in the carrier marketplace in fiscal 2005 has provided a terrific platform for our future, which we believe will enable Intellisync to achieve record revenues in fiscal 2006 and profitability within the next twelve months."

Keith Kitchen, Intellisync's Chief Financial Officer, added, "The investments we have made in products, operations and sales and marketing over the last year are beginning to show dividends in our financial metrics. In fiscal 2006, we intend to further optimize our execution and operations and accelerate our pace of innovation that we believe will help continue our leadership in the enterprise and wireless carrier markets. We believe that our continued growth, combined with expected operational efficiency, will allow Intellisync to begin to report quarterly profit during our fiscal 2006."

Well, their fiscal 2006 is already happening and these men are speaking very loud, for anybody that wanted to listen. You know I'm deaf like a stone so I didn't hear anything until the market, where hard earned money is at stake, talked to me. The market spoke sound and clear, as you can see on the chart below:



Longer term we have a rectangular formation breakout with a technical target of $5.91:



I will buy SYNC at tomorrow's open for the 3 Stocks on Fire Portfolio.

(This recommendation was made by David Randolph from 3 Stocks on Fire, and he will update this analysis everyday after the close until he sells the stock. The 3 Stocks on Fire Portfolio is up 148% since inception on 28th of April 2005. 3 Stocks on Fire is a Community of stock traders and investors. Our 3154 members exchange trading ideas and strategies on our message boards everyday. We welcome you as a new member of the 3 Stocks on Fire Community, please take 10 seconds to register and receive our free newsletter)

[David Randolph]

SYNC made a perfect pullback yesterday and now is running 8% higher as we speak, to a new high. The technical target is $5.91 and the market is saying that I'm right. I have to profit handsomely when I'm right and lose small when I'm wrong.

So, being right, I can't sell at a small profit.

[AussieTrader]

No posts on Sync? I am surprised I think Friday in particular  and last weeks  action was very significant. This weekly chart shows how the last 3 weeks SYNC reversed a downtrend week almost perfectly from way back in Feb '04. That previous downtrend week was preceded by a fall from $6 area, so if history reversal continues..... I see a couple insiders are selling right now though, so some mixed messages (vol 450K). That said as an insider with several millions of options you have to unload to diversify your portfolio no matter how solid you think your company is.

[Michael]

Hi Aussie

This is one of the stocks that is driving me nuts. I like their growth, the fact that they might turn profitable soon, the market they are in but I really don't like the insider selling.

You are right that Mohammadioun has a lot of shares (1.7 million) but 400 000 is still a lot of selling. The rest of the management team have fewer shares and they are also selling. Foster Clyde had only 48 000 and he sold 46 800.

I always try to put myself in the insiders position. Would I sell 95% of my shares if I believed the company's stock was about to explode? Hmmmm........

Most of the team received more stock options last week (Foster Clyde 200 000) so maybe that is why they are selling but.... As said this stock drives me nuts 

I hope David is right as usual. I will however stand on the sideline with this one for the time being.

[David Randolph]

Not many posts but very good ones  Nice technical analysis from Aussietrader and nice info on insider trading from Michael. Thank you.

Let me put insider selling on another angle: insiders are selling a lot of shares, that's true. But, what happened to the stock price? It went up, even with that selling.

What does this divergence tells me?

It tells me the stock has very strong underlying demand, and for some reason that we don't know, it surpasses insider selling. I think RULE 39 applies here: Don't be too curious about the reasons behind the moves

Not even insiders are always right. In the market place there's only one thing that is always right: the market itself. And the market is telling SYNC is going higher.

[PerfectSage]

Hi Dave. I bought SYNC on Wednesday @ $3.94, a little higher than what I sold it for  @ $3.66. It was nice to see that you were buying it too. To me it confirms that my thinking on SYNC wasn't out in left field. PerfectSage

When I look at an SYNC daily chart... ...I think cup & handle???

[David Randolph]

I bought SYNC on Wednesday @ $3.94, a little higher than what I sold it for  @ $3.66.

It takes some stock market experience for a man to do this, and he usually gets paid  Good luck PerfectSage !

Considering SYNC, I will continue to hold the stock, as it is making two steps forward and one back. The ascending trendline now stands at $3.46, and the technical target is $5.91.

[David Randolph]

Well, SYNC gave two steps back 

I have low visibility on this stock (considering that can be said «technically speaking»), which says probably I have a 50/50 chance of being right here.

What puts me ahead in this game is that if I'm right I will profit about 48%, and if I'm wrong I will lose about 12.5%.

I will be right if the technical target of the breakout is reached, at $5.91. I will be wrong if the stock closes below the ascending trendline before reaching the target, and that ascending trendline today will stand at $3.49.

[PerfectSage]

Thanks Dave.

It takes some stock market experience for a man to do this, and he usually gets paid   Good luck PerfectSage !

It's more like book learning experience. I was lucky enough to have read some good books when I was in university before I ever had any "gambling" money that allowed me to avoid most  bad habits. Now if I could only get rid of the overtrading bad habit. LOL PerfectSage 

[David Randolph]

Lol, that's a hard one to get rid of, PerfectSage.

I really don't like the short term technical picture of SYNC, but I've had some problems for not keeping my plans in the recent past. So I'll just stick to the stock for as long as that ascending trendline is in play ... it is possible SYNC falls below the breakout zone, shaking most weak hands when it touches the real support at the ascending trenline.

Anyway, that trendline for today is standing at $3.54 so I'll hold.

[AussieTrader]

Those Analysts!! I don't have any detail other than the headline posted at 06:34 this morning. Watch for effect on todays trading (down 5% in very low vol pre market).

DJ JP Morgan Cuts Intellisync To Neutral From Overweight

[Amarens]

Aussie,

Sorry, but what headline 

Thanks for the information!
Amarens

[Se7en]

07:44 SYNC Intellisync downgraded to Neutral at JP Morgan on valuation (3.98 )

Downgrade is based on firm's view that the co will trade in line with the mean of their coverage universe, near-term. Firm believes that all of the co's anticipated positive catalysts have played out, saying while guidance issued August 30th, was in line with street expectations, they think there remain uncertainties regarding the gradually declining OEM business and lumpy enterprise demand. Firm's longer-term prospects remain excellent and they expect the co to grow rev by at least 26% CAGR through 2008 and for the co to turn sustainably profitable in late FY07

[Amarens]

Thanks Se7en 

[shawFund]

It is already breaks down the support at $3.65.

But we need to see closing price to evaluate the situation.

If it cannot stand, next support is $3.25 area.

Downgrade has such a big effect for short term trend.

The effect will be fading after one week.