Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Regarding the failure to mention interest income, shouldn't it have been mentioned? And did the analystis estimates of $69 revenues include II?
Question: what is the extent of IDCC's WiMax patent portfolio? Is it large, moderate, small or non-existent?
In summary, from First Albany Capital June 2006:
1Q06 overall market shares
Nokia 32.3%
Motorola 19.8%
Samsung 12.5%
LG 6.7%
Sony Ericsson 5.7%.
1Q06 3G market shares
Nokia 19.2%
Motorola 12.0%
NEC 9.0%
Panasonic 6.8%
Sharp 6.3%
LG 6.1%
Sony Ericsson 4.5%.
2010 assumptions
Nokia 32.5%
Motorola 18.8%
Samsung 14.3%
LG 6.9%
test, no posts since 2:07, something wrong with my browser.
A 2 x 1 at $212 and a later 4 x 1 at $647 is just what I'm expecting this year or next.
QUALCOMM has had four stock splits since going public.
February 16, 1994 2 for 1 @ $86 per share
May 10, 1999 2 for 1 @ $212 per share
December 30, 1999 4 for 1 @ $647 per share
August 13, 2004 2 for 1 @ $69.17 per share
At what point does IDCC decide to file a 3G suit against NOK in a federal district court (e.g., Texas rocket docket) and then the ITC? Does it make more sense for IDCC to wait for the results of QCOM's ITC complaint or to file their own actions that would be tried at the same time?
Thanks. I am going to send this to some of my partners.
What is the date of the IBD analysis?
Good question, because usually, secondary public offerings are made by companies wishing to refinance, or raise capital for growth. Do either of these reasons apply to IDC?
Good points.
Mschere, $360 million does open up a world of possibilities. As you noted, they can use the $$$ for existing projects, such as JVs or a chips deal with someone like TI. They need a good war chest for patent litigation, but $10 million would suffice for that, I think. If they can't sign all the major 3G companies this year, I would hope they would sue someone in the Texas rocket docket. A cash dividend might be a good idea, I think. Just my limited thoughts-- I wouldn't presume to think I could make many good suggestions on how to run this comany.
Is he a "valuable poster" or a "valuable pisser"?
Red, see Msg # 153331 on "recurring revenues."
IMO, the $253m from NOK should have the effect of increasing the share price by at least $5 per share (253/55). If, based on the $253m, a $5 dividend were generated, the share price would then go back down $5 ex dividend.
IMO, the best explanation of the conventional WS view is that there, although the $253m is "duly earned," there is no guarantee that a comparable lump sum payment will be generated again from NOK. When NOK signs a 3G license, then this will be counted as recurring revenue spaced over the period of the license agreement.
Yawn. Sorry, but I think you have misunderstood. I wasn't asking you to teach me anything or give me any "ultimate answers" about IDC, but rather my original point was that I think your reasoning was not well-founded and so I was curious to see how you would defend your position. BTW, I thnk the potential for this stock is at least around $250 by 2010.
xdx, okay, I will assume that you and L2V know whatever you say he and you know. Today's posts with L2V have become very tiresome to me. We can all do the math on "recurring revenues."
There are many ways to value a stock, especially one like IDC. In response to my original post, L2V did not seem to realize this, but rather he said I was "not paying attention" because I was looking at things from a different perspective from his.
While I did agree with his basic point, i.e., IDCC's valuation has not yet come into alignment with the fundamentals already in evidence, I do not agree with his analysis.
IMO, most people here realize, that one time paymments such a NOK's $253m are not counted in EPS calculations. The institutional investors want to see "recurring revenues" and not just one-time royalty payments. (There was quite a lot of discussion on this point during the days after the NOK payment and runup and subsequent drop).
L2V, thanks for the "tip," but I still wonder whether you yourself have any idea of the answer to my first question. I doubt that any institutional investors are relying on your number because they want "recurring revenues."
L2V, I am looking at the ihub EPSs and PEs for IDCC and QCOM.
How much of your $3.90 involves non-recurring revenues? Do you even know?
In your analysis, what should be the price of IDC once "IDCC's valuation has come into alignment with the fundamentals already in evidence(i.e., $3.90/shr earnings this year)"?.
So true. IDC's PE should be about the same as Q's (35). Currently, IDC's PE is about 26. This current runup may not end until IDC reaches about 44. And if there is news of a 3G license, it should then go even higher. IMO.
deleted
deleted
Regarding PEs, I do not agree that Q, a company for which, as you say, "most of the growth in royalties and product revenue has already been achieved," should have a PE of around 35 whereas IDC, after 2010, should have one around 15.
It would seem more reasonable that IDC's would be around 25-35.
Also, IDC, I hope, will be developing their other business interests as well, such as chips.
Shouldn't the profit margin increase substantially, given that the analysts who folow IDC say that the increased earnings do not mean much higher costs and so a high percentage of the increased sales will flow directly to the bottom line?
I don't have time to do the math now, but shouldn't we expect a higher share price?
Nic, Nokiashill, Spencer: 35 or 40 seems low. What would be the amount of the 3G license and the new EPS and PE ratio, to warrant only a price of 35 or 40?
sinnet14, this is from page 10 of Halpern Capital's Sept. 05 report
(http://www.wirelessledger.com/TabbedPages/IDCCreport/documents/Robertson092205_000.pdf):
2006 Wireless Terminal Market Forecast
OEM Units % o f % Royalty IDCC
Vendor (M M ) M arket RR ASP Units P er Unit Rev (M M )
Nokia 233.5 29.0% 0.35% $122 70% $0.43 $69.8
Samsung 128.8 16.0% 0.35% $163 55% $0.57 $40.4
Motorola 124.8 15.5% ~~~ ~~~ ~~~ ~~~ ~~~
BenQ (Siemens) 68.4 8.5% ~~~ ~~~ ~~~ ~~~ ~~~
Sony/Ericsson 60.4 7.5% 0.50% $162 60% $0.81 $29.3
LG Electronics 60.4 7.5% ~~~ ~~~ ~~~ ~~~ ~~~
Panasonic 24.2 3.0% 0.90% $205 50% $1.85 $22.3
NEC 20.1 2.5% 0.90% $210 75% $1.89 $28.5
Sharp 16.1 2.0% 1.00% $210 100% $2.10 $33.8
Sanyo 12.1 1.5% 1.00% $200 30% $2.00 $7.2
Other 56.4 7.0% ~~~ ~~~ ~~~ ~~~ ~~~
Total 805.0 100.0% ~~~ ~~~ ~~~ ~~~ $231.4
duplicate
MTJBKH, you have provided no analysis at all to support your view. Here's my analysis: the LG PLA covers a 5 year period and is worth $295 million. The money is paid in equal amounts during the first three years of the PLA. So, for the 5 year period, this yields $57 million recurring earnings per year, or about $1 per share. Samsung has somewhat over twice the market share of LG. So a comparable PLA with Samsung would be worth over $115 million per year. Analysts say the revenues from further PLA's will almost all flow to the bottom line. Ergo, rounding off, we get about $2 EPS for the next 5 years.
If a Samsung 3G PLA occurred in the next few weeks, what would be the likely size of the impact on share price?
Such a 3G PLA should increase earnings per share by about $2. In the unlikely event that the price of the stock stayed the same, the PE would be about 8. Assuming a realistic multiple of about 22 (today's PE ratio), ultimately, this could mean share price appreciation of about 44. But maybe after such an event the PE ratio would go down to below 20 or possibly it would go up to 30 or more.
However, I don't have experience with such a situation, and I don't know what to expect in terms of how fast the PE ratio would reach its "correct" level or what this "correct" level would be.
I'd appreciate hearing any of your thoughts on this.
Some of qcom's early patents (obtained in early 1990's) must be close to expiration.
agree with hookrider.
It strikes me that the gap between qcom's rate of 5% and IDCC's rate of 1% should be narrowed as IDCC has become so cash rich and able to finance litigation. The greater number of Q patents should not be such a great factor because infringement of one patent can result in an injunction.
I know IDC is considered the "baby" Qualcom and Q is a well-established company.
But why the gap between 5% and 1%?
vg --- regarding earnings and revenues, the analysts who follow this stock say that almost all revenues from future PLA's will flow to the bottom line. My estimate is general. For one thing, Samsung's market share is about 2.2 times that of LG. And the PE ratio should be about 25, not 21.5. (QCOM's is about 35).
A Samsung 3G PLA, by itself, could give IDC over $114 million of earnings for the next 5 years. This would be the case if the Samsung 3G deal is comparable to the LG 3G license, because Samsung’s market share is about twice that of LG and the revenue from the LG deal is $57 million per year.
IMO, the Samsung 3G license should have a greater effect on share price than that of the LG 3G license because the LG 3G license merely caused the EPS to become more reasonable: 2005 earnings were $.20/share at a end year share price of about $19 or an EPS of about 95. 2006 earnings are estimated to be about $1.19/share and current EPS is 21.5.
Thus, the impact of a Samsung 3G license (if comparable to the LG 3G licenses) could be increased earnings of $114 or about $2/share. To keep the EPS at around 21.5 (today’s number) would require a price increase of 43, or a share price of 69. If the price only increased to 40, this would give an EPS of 12.5. This would be way too low an EPS for a company with IDS’s potential.
Zacks.com featured InterDigital Communications, Hartford Financial Services, and Swift Transportation
CHICAGO--(BUSINESS WIRE)--May 17, 2006--Kevin Matras outlines a strategy for trading the Zacks Rank that is practical for almost anyone's portfolio. Stocks in this week's article are Hartford Financial Services Group, Inc. (NYSE:HIG), InterDigital Communications Corp. (NASDAQ:IDCC) and Swift Transportation Co., Inc. (NASDAQ:SWFT). Click here for the full story exclusively on Zacks.com: http://at.zacks.com/?id=109
Screen of the Week written by Kevin Matras of Zacks Investment Research:
The Zacks Rank is probably the most effective rating system out there. In good markets or bad, stocks with a Zacks #1 Rank continue to outperform. In fact, since 1988, the average annualized return of Zacks #1 Rank stocks is up 32.8% a year.
But today, I want to focus on recreating those returns in a practical trading account. Since there are typically over 200-plus Zacks #1 Rank stocks at any time, it's important to know what other filters to apply to generate a smaller (more tradable) watchlist. Two filters in particular, when added to the Zacks #1 Rank, not only narrows down the number of qualified stocks to a practical portfolio size (approximately 10-12 stocks), it oftentimes increases its performance as well.
Parameters
The two filters I'm talking about are:
-% Change Q1 Est. over 4 Weeks greater than 0
(Positive current quarter estimate revisions over the last four
weeks.)
-% Broker Rating Change over 1 Week greater than 0
(Positive average broker rating changes over the last week.)
And of course ...
-Zacks Rank equal to 1
These two items added to the Zacks #1 Rank, produce powerful results!
Results
I ran a series of separate tests on the Filtered Zacks Rank strategy over each of the last four years (2002 through 2005). I rebalanced the portfolio every four weeks and started each run on different start dates so each test would be rebalanced over a different set of four-week periods. (This is done to eliminate coincidence and verify robustness.)
In 2002, the Zacks #1 Rank stocks returned just over 1%, with an average portfolio size of approximately 200 stocks. That's an impressive return when compared to the S&P 500's -22%. But holding onto 200 or so stocks isn't doable for most investors. But when adding the two aforementioned filters, the portfolio size shrinks to a tradable 10 stocks (on average), and a phenomenal 18.1% return.
In 2003, the Zacks #1 list (approximately 200 stocks) did nearly 75% in comparison to the S&P 500's almost 29%. But the filtered Zacks Rank narrowed that list down to only 10 stocks (on average) with a return of over 66%. (And while it's true the filtered Zacks Rank produced a smaller return than the full Zacks Rank (66% vs. 75%), rebalancing only 10 stocks a month is far more manageable than 200.)
And it was right on track again for 2004. The annualized returns for the Zacks #1 Ranked stocks was up 28.8% with an average portfolio size of 202 stocks. (The S&P was up only 10.9%.) But the filtered Zacks #1 Rank's annualized returns were up 30.3%, with again only 10 stocks to hold on average.
In 2005, the complete list of the Zacks #1 Rank stocks showed an average annualized gross return of 31.7% with an average portfolio size of 208 stocks. The Filtered Zacks Rank was up 42.4%, but with an average portfolio size of only 10-12 stocks. (And while both of these numbers are impressive, 10-12 stocks is way easier to trade than 208!)
And so far in 2006 (YTD through 4/28/06), the complete list of Zacks #1 Rank stocks is showing an average compounded return of 17.4% while holding an average of 213 stocks in its portfolio at a time. But the Filtered Zacks Rank is up 18.3% with a much more practical 10 stock portfolio.
Here are a few of the stocks that qualified for the Filtered Zacks Rank this week (5/15/06):
HIG Hartford Financial Services Group, Inc.
IDCC InterDigital Communications Corp.
SWFT Swift Transportation Co., Inc.
Get the rest of the stocks on this list and start trading the filtered Zacks Rank (or any of our other strategies) in your own account. Remember, the key to successful screening is in discovering those screens that have produced profitable results in the past. And that's exactly what you get with the Research Wizard stock picking and backtesting program. Click here to learn more.
http://at.zacks.com/?id=111
About Screen of the Week
Zacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine. But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use. Each week, Zacks Profit from the Pros free email newsletter shares a new screening strategy. Learn more about it here http://at.zacks.com/?id=112
You didn't answer my question so I will not answer yours.
If we get a Samsung settlement and 3G license this month, how much appreciation do you think this would mean for our stock price?
Hrbrt, A PLA with Samsung should be worth twice that of LG because Samsung has twice the market share of LG. So, the PLA with Samsung should be worth 114 million in annual revenues and an estimated 105 million in profits, div by 50 million shares = $2 of increased earnings per share. At a PE ratio of 25, this yields a price increase of 50 for the PLA with Samsung alone. Today’s IDC PE ratio is about 27.
I agree with Captainslog. Visions of 2010--$700 m revenues.
I realize the following is a very rough calculation with alot of assumptions but...
1Q 2006, $12.9 million, or 23 cents per share = $52 m per year, with revenues of $208 m.
With $700m of revenue by 2010, this is an increase of about $492 m.
Halpern Capital states in their Sept. 2005 analysis that IDC's costs are virtually flat and almost all increased revenues will flow to the bottom line; so assume costs go up 10% to about $229m.
Then, this implies annual earnings in 2010 of about $471 m.
Assuming today's number of about 50 m shares, this is earnings of about $9.4 per share. At 25x earnings, this yields a share price of $235.
What is the reference to $700,000???
When the Samsung license is signed, what do you think its terms will be?
Samsung has twice the market share of LG, and LG is paying $57 m per year for 5 years.
If Sam pays $100 m, that is $2 per share and at 25X earnings, the share price could be driven to.....