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I can't believe that you have to argue about something as simple as that! I just can't.<g>
Just to make this post worthwhile, here's an excerpt from a Louis Navallier interview:
Q. You're sounding very bullish these days.
A. I'm very positive because the market's being reliquified. The market had a flow of funds problem for two-and-a-half years and what's happened, growth stocks seem to be in the first inning of a big rally that could probably last two, two-and-a-half years.
There's no doubt that the rally was caused by rising volatility over asset classes, bonds -- actually value stocks have been very volatile for nine months.
So I'm very positive because money seems to be reallocated to growth, our volatility continues to plunge, I don't have to trade stocks as much any more.
Earnings are definitely accelerating. Corporate profits are going to be phenomenal for the remainder of the year.
And I'm at the lowest growth P/E ratios that I've ever seen, so the fundamentals are there, the liquidity is coming in, so it's a wonderful time. I honestly think we're in the first interval of a long-term cycle.
The breadth and power of our database has also improved. Late last year only the top18 percent of stocks were any good. Now the top 30 percent are good and that's a good sign.
Q. You're also impressed by ratio of money market fund assets to the Wilshire 5000 Index.
A. Record levels of money are hiding in money-market funds. That's very bullish, because when it got high in the past, the market always took off. In '82 it was 22 percent and that started a big bull run. In '91 it was 17 percent -- and we went up 80 percent that year.
And now it's 27 percent -- a record high.
There's lot of money to fuel this market. The average investor, it's going to take them a long time to come back in. But already, the dividend yields in the Dow or S&P are at or near where Treasury securities are. So you get the dividend yield and maybe some potential appreciation.
Q. And you're encouraged by the 'four-year election cycle'?
A. That's the oddest anomaly out there. In the third year of a presidential term they have to stimulate the economy so that they get reelected. Clinton cut capital gains. Bush is trying to stimulate the economy with dividend relief. See related story.
Q. You have two newsletters. Who is the Blue Chip subscriber and who is the MPT subscriber?
A. The Blue Chip subscriber is a conservative investor who wants to buy and hold stocks for a year or more. It is a very diversified portfolio. It was started over six years ago during the indexing boom.
I felt that I could beat the S&P 500, so whether it's our large-cap growth fund (NPLGX: news, chart, profile) or our Blue Chip Growth letter, we want to prove to people that you can beat the S&P with a lot less risk.
I think one of the things that's helped us is that the market was very narrow and we just weren't finding that many stocks. So the crème de la crème were doing find.
MPT is a small-, mid-cap letter. Much more aggressive. Been around forever. The deal with MPT though, is those stocks are very sensitive to flow of funds.
When money is leaving the market, they just don't do well. When money's pouring back in, they're explosive. They're doing very good right now.
Where I'm just as pleased as I can be with both letters, is the volatility is plunging because the stocks, for lack of a better word, are being reliquified. Money's returning to the market. And the stocks with good earnings that we specialize in, seem to be capturing a lot of those flow of funds. So I'm very optimistic at this juncture.
http://www.marketwatch.com/news/print_story.asp?print=1&guid={1D82C56D-39AC-4A34-B20C-8B7C66BB6F....
You should have read the elaborate lecture I got on how "market cap is affected [sic] by share price"!!!! <g>
That's a good win for the small guys. Here's another patent case closer to the wireless industry. I'm sure that there are some crackberry users here.
The legal battle between RIM and NTP began in late 2001 when a group of Illinois-based inventors said in a statement of claim that RIM's BlackBerry infringed on eight wireless patents controlled by NTP. The legal battle caught RIM investors by surprise last November, when a U.S. jury ordered the company to pay $23.1 million to NTP.
http://biz.yahoo.com/rc/030526/tech_researchinmotion_3.html
Here's an interesting Blackberry application developed for 2G and 2.5G networks. The President and CEO of StarHub is an IDCC board member. His insights about the deployment of this type of corporate application should be extremely useful to IDCC as it tries to transition from being just a research-oriented company to also being a product-oriented company.
Their previous lack of success with the UltraPhone and the BCDMA fixed wireless products show that they need to keep on recruiting aggressively to get the right managers and engineers to get them over this hump.
The highly secure mobile email and data solution supports Microsoft Exchange and IBM Lotus Domino(TM) environments allowing easy integration with the user's corporate email address and mailbox. Emails and calendar appointments are automatically "pushed" to and sent from the industry-proven handheld while they're out of the office. The handheld features a patented, built-in keyboard that makes it extremely easy to type using two thumbs. The BlackBerry handheld is an indispensable communications tool for busy executives.
The "always-on" data and email connectivity is provided via StarHub's robust GSM/GPRS network. Coupled with over 40 GPRS roaming destinations covering major destinations in Asia, Europe and the USA, StarHub's customers are able to manage their corporate email overseas. No need to dial-in or "pull" data, no time wasted and all the latest email and PIM "pushed" to their handheld automatically.
http://biz.yahoo.com/bw/030527/265051_1.html
From the proxy statement......
STEVEN T. CLONTZ, 52, became a director of the Company in April 1998. In January 1999, Mr. Clontz became President and Chief Executive Officer of StarHub Pte., Ltd. (“StarHub”), an info-communications corporation specializing in fixed and mobile telecommunications services located in Singapore. Mr. Clontz has also served as a director of StarHub since 1999. Mr. Clontz was President and Chief Executive Officer of IPC Information Systems, Inc. (“IPC”), a New York corporation which developed, manufactured and sold specialized telecommunications products and services to the financial trading industry, and served on the Board of Directors of IPC from December 1995 to December 1998.
Another interesting StarHub project focused on the corporate market:
Added Mr Yu, "StarHub is aggressively moving into the WiFi arena by adopting an extensive hub strategy over a traditional spot strategy as market dynamics and usage patterns favour a more focused roll-out. We believe that the early WiFi adopters will continue to be in the business segment and we've targeted key areas in Singapore where there is a clear demand for the service."
http://www.starhub.com.sg/newsroom/newsrm_press.asp
So.....who was it who wanted to get cheaper directors? LOL.
Fixed content storage grabs users' attention
By Deni Connor
Network World, 05/26/03
Users need to start evaluating their options regarding storage of fixed content data now that analysts have predicted it will consume more than half of a corporation's storage resources by 2005.
Fixed content storage consists of data such as digital images, e-mail messages, presentations, video content, medical images and check images that don't change over time. Unlike transaction-based data, whose usefulness is short, fixed content data must be kept for long periods of time, often to comply with retention periods and provisions that government regulations such as the Sarbanes-Oxley Act of 2002 have specified.
Analyst firms such as The Yankee Group say that the market for fixed content data will grow from 308,000 terabytes this year to 1,251,900 terabytes in 2006. Enterprise Storage Group says that fixed content reference information will represent 54% of all data by 2005 and will grow faster than that of traditional transaction-based and file-oriented storage.
While fixed content storage consists of a variety of data that must be referenced and addressed, it's a huge market nonetheless, which requires some unique capabilities to store it and differentiate it from short-lived transaction-based data.
A number of issues are driving the growth of fixed content, analysts say.
"The biggest one is compliance," says Jamie Gruener, a senior analyst for The Yankee Group. "Compliance is multidimensional - not only do you need to save the information in an indexed way, you also need to be able to access the information at a fairly rapid rate. And in some cases, it has to be preserved in an unaltered, unrewritable state."
Other issues include the type of media used for storing fixed content data and its cost............
Object-oriented storage
Enter Centera, an object-oriented storage system that EMC introduced last year.
Traditionally, storage is viewed as either blocks or files of data that are subject to being retrieved from a specific location and media type. Block-oriented data resides on Fibre Channel storage-area networks and direct-attached storage; file-oriented data on network-attached storage.
In object-oriented storage, each piece of data is represented as an object and automatically is assigned a unique digital identifier or fingerprint. The fingerprint is used to retrieve the object, irrespective of its location and placement, whether on tape, spinning disk or ATA media. As data moves from disk to tape during its life cycle, its fingerprint, sometimes called metadata, tracks its location, so that it can be retrieved quickly and so that related data objects, such as X-rays and test results for a patient, can be correlated coherently.
The same digital fingerprint identifies not only the location of the data but its character. For instance, an X-ray that is stored on optical media could be associated with a keyword in a document management system and from there to the patient's chart and prescription information.
Robert Terdeman, senior vice president and CTO for Rogers Medical Intelligence Solutions in New York City, chose Centera to store the volumes of clinical information Rogers sells to pharmaceutical, biotechnology firms and healthcare professionals. He combines it with Documentum's enterprise content management platform, which organizes the data before handing it off to Centera for storage.
"A lot of our collateral comes in on paper," Terdeman says. "We take it and extract key words and store the collateral on the EMC Centera. We are constantly asked to go back and look for this piece of information or that document, and we can never throw it away.
"Data could be relevant 10 or 12 years down the road," he says. "For instance, with our Retrospective Data Analysis, you can search back 12 years on urinary tract infections. We have the largest repository of unpublished medical information in the world."
Before using Centera, Rogers had cabinets of paper records that took hours to dig through to extract information. They weren't easily accessible to people who needed information.
A year ago, Terdeman started to redesign the information network for the company, which had a 100 people and was unprofitable.
With Centera, Terdeman went from negative profitability to "roughly $2 million profitability. We reduced the head count from 100 to 71 solely based on the implementation of scanning and the Centera technology. The five terabytes of the Centera was less than the fully loaded support cost of one technician," he says. "By that itself, it was justified." n
http://www.nwfusion.com/news/2003/0526specialfocus.html?page=2
802.16a is considered the next step beyond Wi-Fi because it is optimised for broadband operation, fixed and later mobile, in the wide area network (WAN).
If I recall correctly, IDCC first got involved with 802.16 in late 1999 or early 2000 when the WiFi (802.11) US installed base was less than 500,000. Since then Cisco bought Linksys (sales of about $200M-$300M) for about $500M in stock and NetGear (sales of about $200M) filed for an IPO. Microsoft and Intel have also entered the WiFi market.
From the company website:
Company management and engineers have or are currently serving in a number of leadership positions in key industry standards bodies including...
Chair of the IEEE 802.16 Tga (Broadband Wireless Access, 2-11GHz);
Chair of the 802.16 Mobile Study Group;
http://grouper.ieee.org/groups/802/16/
Vice Chair of the 3GPP RAN Working Group 3 (WG3);
Vice Chair of T1P1.4 Wireless Wideband Internet Access;
North American Rapporteur for ITU-R IMT-2000 Deployment Handbook;
Editor, 3GPP RAN WG1, Physical Layer Procedures (TDD) (R5) and
Editor and Rapporteur, 3GPP RAN WG4, TDD Base Station Classification.
I know some quants that do not try to measure subjective factors like management in the interest of keeping the numbers "pure," but I'm still not persuaded that this can be done effectively with technology companies because of the obsolescence factor.
For example, the board of directors is responsible for authorizing option grants and other compensation issues through the Compensation Committee. The record clearly shows that IDCC's board made a conscious decision to increase R&D dramatically after the devastating 1995 Motorola loss.
IDCC spent a mere $24M in R&D in the 3 years (1992-1995) after the 1992 merger of its TDMA patent portfolio with SCS's CDMA patent portfolio. It spent $63M in R&D for the 3 year period from 1996 to 1998 (before the Nokia deal) and $138M in R&D from 1999 to 2002 (after the Nokia deal and before the Ericsson settlement). Note the progressive increase in R&D spening after each level of accomplishment.
The direct results of more than $200M in R&D spending since 1995 have been IDCC's increased influence in the 3G standards committees and the dramatic increase in CDMA patent production -- built on the foundation of the Schilling CDMA patents --, which both increase the likelihood that IDCC will be able to monetize its CDMA portfolio successfully. I doubt that a quatitative approach would have captured all those tangible and intangible benefits.
I don't think anyone can credit those developments entirely to IDCC's engineers and scientists because very smart people tend to do very stupid things to each other without very smart management to keep these inventive types focused on the business plan. If one accepts that premise then one can understand the very high degree of difficulty of the recruitment process after the Motorola loss.
I also don't think anyone can be constructive about IDCC's business plan without understanding how this management team views and uses R&D since R&D will clearly play the crucial role as IDCC completes its turnaround and starts to grow.
And not just ordinary bonds, as you said, he gets all the off the menu stuff too.
Check out Bell Industries (BI), a small California computer services company. He bought more than 5% of this company for his personal account in 1999 before BI distributed $7.00 per share in special dividends as a result of some asset sales. This one appears to have been strictly a trade since he sold all his shares soon after the special dividend distributions.
An Interview with Warren Buffett in 1974
The following interview with Warren Buffett, taken from the November 1, 1974 issue of Forbes magazine, still makes for interesting and useful reading today.
How do you contemplate the current stock market, we asked Warren Buffett, the sage of Omaha, Neb.
"Like an oversexed guy in a whorehouse," he shot back. "This is the time to start investing." [Forbes substituted 'whorehouse' with 'harem' when they printed the story -- a sign of the times.]
The Dow was below 600 when he said that. Before we could get Buffett's words to print, it was up almost 15% in one of the fastest rallies ever.
http://216.239.33.100/search?q=cache:GOHriKRWg2MJ:www.maoxian.com/archive/20030108.html+warren+buffe...
since it is a major factor in almost every investor's DD
One can always buy technology. I don't buy shares in a company if I'm not comfortable with the company's management. Period.
Yes, those boundaries got stretched a bit during the late 90s. More than $300B in mutual fund money follow the indexes so those definitions probably matter most to the index managers.
Here's another source of funds flow information.
Stock Mutual Funds Saw $1.48 Billion Outflow Tuesday-Thursday TrimTabs
Tuesday May 27, 4:09 pm ET
By Michelle Rama, Of DOW JONES NEWSWIRES
NEW YORK -(Dow Jones)- Investors took $1.48 billion out of stock-based mutual funds Tuesday through Thursday, according to TrimTabs.com Investment Research.
By contrast, investors added $1.25 billion to bond-based mutual funds during the same period, TrimTabs said.
International stock funds accounted for most outflows from equity funds, as investors withdrew $1.4 billion. Domestic stock fund investors contributed $79 million.
Among domestic stock funds, aggressive growth fund investors redeemed $569 million, and growth and income funds lost $166 million in investments, while investors contributed $656 million to growth funds.
The Dow Jones Industrial Average gained 1.2% during the same period, while the tech-heavy Nasdaq Composite Index added 0.1%. The Standard & Poor's 500 index rose 1.2%.
In bond funds, corporate bond funds saw inflows of $690 million, government and Ginnie Mae funds added $563 million, and high yield funds lost $4 million. Municipal bond fund investors redeemed $65 million, and hybrid funds, which invest in both stocks and bonds, took in $69 million.
TrimTabs.com, Santa Rosa, Calif., computes its estimates by directly tracking the cash flow of 679 stock funds and 291 bond funds through a computer model.
The results are meant to approximate the inflow and outflow for the much larger set of funds - 4,750 stock funds and 2,522 bond and hybrid funds - tracked by the Investment Company Institute, an industry trade group in Washington.
Large-Cap Funds
Large-capitalization funds generally invest in companies with market values of greater than $8 billion. Some, like the Vanguard 500 Index fund, merely mimic the index and invest in all 500 companies. Others, like Fidelity's huge Magellan fund, try to beat the index by picking a mix of large caps that will outperform the broader market.
Mid-Cap Funds
As the name implies, these funds fall in the middle. They aim to invest in companies with market values in the $1 billion to $8 billion range -- not large caps, but not quite small caps, either. The stocks in the lower end of their range are likely to exhibit the growth characteristics of smaller companies and therefore add some volatility to these funds. They make the most sense as a way to diversify your holdings.
Small-Cap Funds
A small-cap fund, like Turner Small Cap Equity, will focus on companies with a market value below $1 billion. The volatility of the fund often depends on the aggressiveness of the manager. Aggressive small-cap managers will buy hot growth and technology companies, taking high risks in hopes of high rewards. More conservative "value" managers will look for companies that have been beaten down temporarily by the stock market. Value funds aren't as risky as the hot growth funds, but they can still be volatile.
Micro-Cap Funds
We're talking small fries here -- companies with market values below $250 million. These funds tend to look for either startups, takeover candidates or companies about to exploit new markets. With stocks this small, the volatility (read risk) is always extremely high, but the growth potential is exceptional. Bridgeway Ultra-Small Company, for instance, sported a three-year average annual growth rate of 15.9% at the end of 1998, but in August, it had just come off a 13-week stretch in which it lost 22.8%.
http://biz.yahoo.com/edu/mf/sm_mf2.sm.html
AMGDATA excerpts......
5/21/2003 (Weekly)
Equity funds report net cash inflows totaling $500.6 million for the week ended 5/21/03 - with most going to Aggressive ($766.7 million) and Large Cap Growth ($644.0 million) funds;
International Equity Funds report largest outflows since 3/5/03 ($1.0 billion) from all emerging and developed regions;
5/14/2003 (Weekly)
Equity funds report net cash outflows totaling $67 million for the week ended 5/14/03 - with International and Global equity funds reporting outflows and Aggressive and Small Cap Growth/Value funds reporting inflows;
5/7/2003 (Weekly)
Equity funds report net cash inflows totaling $1.1 billion for the week ended 5/7/03 - with half going to Small Cap funds ($550 million) and half going to other domestic and international emerging market sectors;
4/30/2003 (Weekly)
Equity funds report net cash outflows ($796 million) for the week ended 4/30/03 - with most domestic and international sectors reporting redemptions
5/9/2003 (April Monthly Report)
Equity funds report net cash inflows of $12.9 billion in April, the largest inflow since $17.0 billion was reported for April 2002. Almost half of the domestic large cap equity fund inflows went to American Funds ($3.2 billion), Vanguard ($1.6 billion), and Fidelity ($1.3 billion);
Inflows to the remaining 93% of equity funds that report weekly went primarily to riskier sectors representing less than 30% of equity assets (see table below);
YTD NET CASH FLOWS (Distributions Excluded)
.
APRIL YTD ASSETS %ASSETS
.
All Equity Funds $12.848B $7.001B $2.401T
.
Aggressive Growth 1.452B 0.232B 263B 10.92%
Small Cap Growth 1.076B (1.226B) 181B 7.44%
Technology 0.204B (0.260B) 37B 1.49%
International Equity 1.927B 4.182B 228B 9.41%
4/11/2003 (March Monthly Report)
Equity funds report net cash inflows ($1.2 billion) in March, with most going to domestic large cap equity funds in the Vanguard ($2.7 billion) and American Funds ($1.2 billion) complexes
3/19/2003 (February Monthly Report))
Equity funds report net cash outflows ($10.0 billion) in February, with most domestic sectors reporting redemptions. There were inflows to the International, Equity Income, Real Estate, and Energy sectors;
2/10/2003 (January Monthly Report)
Equity funds report net cash inflows ($3.0 billion) in January, the smallest January inflow on record, with most domestic sectors reporting redemptions. The largest inflows were reported by International funds ($2.2 billion to all developed and emerging regions except Latin America). Large inflows were also reported by Equity Income funds ($948 million).
1/15/03 (2002 Annual Report)
2002 Inflows Highest on Record to Bond Funds-Lowest to Stock Funds
In 2002 Taxable Bond funds reported the largest inflows on record ($133.5 Billion) with just under half (48%) going to funds investing in Corporate Bonds. Investment Grade Corporate Bond funds reported inflows of $43.0 Billion, the largest of any sector.
Equity Funds reported net cash inflows of $11.7 billion, the smallest since AMG began reporting investor fund flows (1992). The sector reported net cash inflows of $81.4 billion from January through May and net cash outflows of $69.7 billion from June through December.
The largest inflows were reported by:
Small Cap Growth funds ($18.8 billion);
International Equity funds ($10.4 billion);
Equity Income funds ($6.2 billion).
The largest outflows were reported by:
Large Cap Growth/Value funds ($12.3 billion; 1.4% assets);
Technology funds ($6.7 billion; 20.4% assets).
Municipal Bond Funds report record inflows ($20.2 billion).
Money Market fund assets stand at $2.3 Trillion.
Yes, Microsoft went public on March 13, 1986 with 1985 sales of $140M and a net profit of $24M. By 1995 it had sales of $6B and a net profit of $1.45B. TTM sales is now more than $31B and TTM net profit is $9.6B!!!
Marvell is probably a more reasonable role model for IDCC down the line. Marvell is a fabless communications and storage chip vendor. Note the relationships between dilution and R&D, and between R&D and the torrid sales growth.
As of the last 10K, Marvell had 24.8M options exercisable at an average weighted price of $17.09 representing $424M in potential cash infusion for a company with $265M in cash/marketable securities and an annual capex budget of less than $25M. Market cap is $3.9B.
.
.
MARVELL (MRVL)
FY1999 to FY2003
.
FY O/S R&D Sales
.
1999 32.5M $ 5.8M $ 21.3M
2000 81.5M 14.5M 81.4M
2001 66.3M 35.2M 143.9M
2002 114.4M 93.4M 288.8M
2003 119.2M 145.7M 505.3M
.
.
.
Just by looking at the frenzied postings of the usual suspects, it's either the issue of executive compensation or the issue of dilution that is gnawing away at them. Let's take another look at the issue of dilution.
Again, the useful question to ask is why do these naysayers lack the intellectual honesty to compare the dilution rate of IDCC with its peers?
The pure IPR operating business model is a very high margin but very high friction business. It is very, very difficult to implement, much less finance on a stand-alone basis.
Most companies actually follow the IBM model where the royalty business is a byproduct of years of R&D investments. IPR companies like QCOM, IDCC, RMBS and ARMHY are actually the exceptional cases so a closer examination of the dilution rates of these companies is necessary if someone wants to discuss the issue of dilution productively.
1) QCOM diluted its stock from a split-adjusted 313M shares in 1992 to 809M shares in 2002 to partially finance its growth from $108M in sales in 1992 to $3.0B in 2002.
2) RMBS diluted its stock from a split-adjusted 23M shares in 1995 to 97M shares in 2002 to partially finance its growth from $7M in sales in 1995 to $97M in 2002.
3) Using ADRs for comparison, ARMHY needed to dilute its stock to the tune of 313M shares to reach the $70M sales level in 1998. After its 1997 IPO, it then proceeded to dilute its stock from 313M shares in 1998 to 338M shares in 2002 in order to partially finance its growth from $70M in sales in 1998 to $243M in 2002.
4) IDCC diluted its stock from 24M shares in 1992 to 47M shares in 1995 to 56M shares in 2002 to partially finance its growth from $40M in sales in 1992 to $85M in 1995 to $88M in 2002.
The common denominator of these IPR companies is that they all invested heavily in R&D to get into a position where they can now generate recurring licensing streams. In other words, they wouldn't have been able to advance from point A to point B or from point B to point C (here and now) of their respective business plans since the R&D arms race continues to be very option-intensive.
IDCC spent more than $210M in R&D from 1995 to 2002. Recurring royalties have increased and patent production has increased, particularly in the last 2 years. The 2003 MIT Technology Patent Score Card provides some idea of just how wisely IDCC spent all those R&D dollars.
http://www.technologyreview.com/scorecards/index.asp
QCOM ranks 6th out of a telecom field of 65, but is far and away the most prolific royalty collector in the wireless industry in absolute dollar terms - $3.4B in royalties collected since 1992 or $4.20 per share).
IDCC ranks 25th out of the same telecom field of 65, but is far and away the most efficient collector of royalties in the
wireless industry in cumulative royalties per share -- $485M in royalties collected since 1992 or $8.66 per share. It is also one of the smallest companies in that list.
Was all that dilution really in vain?
Of course not.
Fortunately, I don't have to wade through the mud again to see that the same naysayers are once again drowing in the shallow waters of their own subjectivity.
Let's see. Executive compensation? Why is it that the people who complain about this issue do not have the intellectual honesty to relate pay to performance using stock and non-stock metrics?
.......Other institutional investors pay less attention to raw dollars, scrutinizing compensation in the context of performance. "We're more focused on the fact that it's okay if the CEO makes a lot of money if all the shareholders are making a lot of money," says Elizabeth Fender, managing director of corporate governance for TIAA-CREF, a pension plan provider with $261 billion in assets..........
.............I would much rather own stock in a company where the CEO's pay doubled because the earnings per share and the stock rose 50%," said Nygren.
http://www.thestreet.com/tech/kcswanson/10081044_2.html
CEO COMPENSATION
. Median value Median value YOY
2001 2002 %
.
Cash compensation $ 966,026 $1,000,000 3.5%
Long-term compensation
inc. stock options &
restricted stock 9,506,716 $7,239,680 (23.8%)
.
Total compensation $10,397,763 $8,800,925 (15.4%)
.
Source: Equilar
Interdigital (IDCC)
Selected Financial Data
1995 to 2002
.
.
Net Proceeds Major
from issuance Cash Cash/
of common stock + Royalties = Inflows Mkt. Sec. R&D
.
1995* $ 13M $ 68M $ 81M $ 65M $ 10M
1996** 10M 29M 39M 55M 22M
1997** 0.4M 6M 6M 26M 24M
1998 0.8M 92M 93M 52M 17M
1999*** 12M 66M 78M 83M 21M
2000 12M 51M 63M 89M 26M
2001 3M 53M 56M 90M 44M
2002 12M 88M 100M 88M 47M
2003**** - - - - -
.
Total $ 63M $453M $516M $168M
.
*Motorola debacle
**BCDMA Alliance - Siemens (1994), Samsung (1996),
Alcatel (1997)
***Nokia deal
****Ericsson deal
.
Source: 10Ks (SEC)
.
.
.
Qualcomm (QCOM)
Selected Financial Data
1995 to 2002
.
Net Proceeds Major
from issuance Cash Cash/
of common stock + Royalties = Inflows Mkt. Sec. R&D
.
.
1995 $499M + $ 45M $ 544M $ 579M $ 80M
1996 24M 100M 124M 154M 162M
1997 33M 152M 185M 809M* 236M
1998 50M 218M 268M 303M 349M
1999 1.3B 454M 1.8B 1.7B 381M
2000 144M 705M 849M 2.5B 340M
2001 132M 777M 909M 2.6B 415M
2002 120M 851M 971M 3.2B 452M
.
Total $2.3B $ 3.3B $ 5.6B $ 2.4B
.
*Includes $606M in net proceeds from the issuance
of trust convertible preferred securities of
subsidiary trust
.
Note: Royalties have 80%- 90% gross margins depending
on the costs of patent enforcement. For the purposes of
this analysis, the simplifying assumption is that
royalties are as good as cash
.
Source: 10Ks (SEC)
One thing that can be said about the way QCOM has
managed its balance sheet over the years is that
it has consistently taken full advantage of whatever
the market was willing to give to them.
For instance, the March 1999 landmark deal with Ericsson
allowed it to generate more cash from option exercises
and royalties than at any other point in its corporate
history! As a direct result of a stronger balance sheet,
they can enforce their patents better and invest more in
R&D consistently.
Note that QCOM has an even more generous options program
than IDCC and it effectively sets the market prices for
top 5% wireless managerial and technical talent despite
the fact that its stock has been in a relentless decline
since 2000.
.
Qualcomm (QCOM)
Selected Financial Data
1995 to 2002
.
.
Net Proceeds Major
from issuance Cash Cash/
of common stock + Royalties = Inflows Mkt. Sec. R&D
.
.
1995 $499M + $ 45M $ 544M $ 579M $ 80M
1996 24M 100M 124M 154M 162M
1997 33M 152M 185M 809M* 236M
1998 50M 218M 268M 303M 349M
.
1999 1.3B 454M 1.8B 1.7B 381M
.
2000 144M 705M 849M 2.5B 340M
2001 132M 777M 909M 2.6B 415M
2002 120M 851M 971M 3.2B 452M
.
.
**Includes $606M in net proceeds from the issuance
of trust convertible preferred securities of
subsidiary trust.
.
Note: Royalties have 80%- 90% gross margins depending
on the costs of patent enforcement. For the purposes of
this analysis, the simplifying assumption is that
royalties are as good as cash.
.
Source: 10Ks (SEC)
Thanks for clarifying that, Joel. The RS/RSU/Option numbers are in SHARES while the R&D numbers are in dollars. I extracted those numbers from the 10Ks.
Yes. The 1999 Stock Plan is available only to management/consultants while the 2000/02 Stock Plan is available to everybody in the company. Different tax rules apply to both plans. The proposed increase of 5M is for the general plan.
The useful correlation is between the 1999/2000/02 Stock Plans and Research & Development during IDCC's turnaround stage which was bookended by the early 1999 Nokia deal and the early 2003 Ericsson deal.
Looking backwards, it is clear that IDCC wouldn't have been able to invest effectively in R&D without a generous options program. Looking forward, IDCC wouldn't be able to invest effectively in R&D without a generous options program at least until the accounting rules are changed for everybody.
.
.
Interdigital (IDCC)
Equity Incentive Plans vs R&D
1999 to 2002
.
.
1999 1999 2000/02 2000/02
RS/RSU RS/RSU Options Options
Outstanding Available Outstanding Available R&D
(shares) (shares) (shares) (shares) ($$$)
.
1999 0.322M 1.178M 4.483M 5.722M $20.481M
2000 0.688M 2.831M 5.919M 5.800M 26.013M
2001 0.813M 2.687M 10.564M 0.971M 44.550M
2002 0.915M 2.585M 10.462M 1.878M 46.686M
.
.
RS/RSU - Restricted Stock/Restricted Stock Units
Source: 10Ks
.
.
Network Engines (NENG)
Sales Trend
1Q02 to 3Q03
.
.
TidalWire Centera Others Total
.
1Q02 - $ 1.5M $ 0.6M $ 2.1M
2Q02 - 2.3M 0.7M 3.0M
3Q02 - 3.4M 0.7M 4.1M
4Q02 - 4.8M 0.5M 5.3M
.
FY02 - $12.0M $ 2.5M $14.5M
.
1Q03* 0.3M 4.9M 0.8M 6.0M
2Q03 $10.2M 8.1M 1.1M 19.2M
.
3Q03(E) $10.5M 10.4M 1.1M $22.0M
3Q03(E) $11.5M 11.4M 1.1M $24.0M
.
*TidalWire acquisition closed late in 1Q03
.
Company Offers Financial Guidance
.
Based on current forecasts, the Company
anticipates net revenues in the third
fiscal quarter ending June 30, 2003 will
be between $22 million and $24 million.
The Company expects net revenues from
server appliance sales to be between
$11.5 million and $12.5 million and net
revenues from distribution operations to
be between $10.5 million and $11.5
million.
.
The Company anticipates third quarter
gross margins will be between 19.5 percent
and 21.5 percent, depending on sales
volumes and the mix of business during
the quarter.
.
Operating expenses in the third quarter
are expected to increase to between
$5 million and $5.3 million.
.
On a GAAP basis, the Company expects a
net loss of between $200,000 and $500,000,
or approximately $0.01 per share for the
third quarter. This projected net loss
includes approximately $254,000 for the
amortization of intangible assets related
to the TidalWire acquisition and $245,000
of stock compensation expense.
.
The cash position at the end of the third
quarter is expected to be between
$33 million and $35 million. This projected
decrease in cash is primarily due to
increased investments in working capital due
to the growth of the business.
.
http://investors.networkengines.com/ireye/ir_site.zhtml?ticker=neng&script=410&layout=-6&....
.
OUTSTANDING SHARES (DILUTED) - 33.5M shares
.
SI Board
.
http://www.siliconinvestor.com/stocktalk/msg.gsp?msgid=18881871
.
.
They can't issue more than the authorized number of options or shares, Jim. I suggest you call IR so they can walk you through the thicket of arcane laws and rules covering this subject.
Have a good weekend!
From the 2000 Proxy.....
The 2000 Plan would replace a number of Company plans, including the Non-Qualified Stock Option Plan, 1992 Non-Qualified Stock Option Plan, 1992 Employee Stock Option Plan, 1995 Employee Stock Option Plan, and 1997 Stock Option Plan for Non-Employee Directors but excluding the 1999 Restricted Stock Plan and the Company's bonus plan (the "Preexisting Plans").
The 2000 Plan would allow the Company to continue to grant options, as under the Preexisting Plans, but would also authorize a broad range of other awards, including restricted and deferred stock, performance awards, stock appreciation rights ("SARs"), other types of awards based on the Company's Common Stock (collectively, "Awards"), and cash-based performance awards.
If the 2000 Plan is approved by shareholders at the Annual Meeting, no further awards will be granted under any of the
Preexisting Plans.
I'm almost certain that the 1999 Plan referenced in the 2003 Proxy consists mostly of restricted stock and restricted stock units used for management and consultants. Restricted Stock & Restricted Stock Units vest over a shorter period of time and ARE already expensed against earnings. The 2000 Plan consists of options that ARE NOT expensed against earnings. The options under the 2000 Plan are generally available to all management and employees.
You may want to call IR to make sure.
From the 2000 Proxy Statement......
The 2000 Plan would replace a number of Company plans, including the Non-Qualified Stock Option Plan, 1992 Non-Qualified Stock Option Plan, 1992 Employee Stock Option Plan, 1995 Employee Stock Option Plan, and 1997 Stock Option Plan for Non-Employee Directors but excluding the 1999 Restricted Stock Plan and the Company's bonus plan (the "Preexisting Plans").
.
Interdigital (IDCC)
RESTRICTED STOCK &
RESTRICTED STOCK UNITS
1999 to 2002
.
.
. Authorized Outstanding Available
.
12/31/99 1,500,000 322,000 1,178,000
12/31/00 3,500,000* 668,008 2,831,992
12/31/01 3,500,000 812,658 2,687,342
12/31/02 3,500,000 915,064 2,584,936
.
.* increased on 4/13/2000.
From the 2003 Proxy Statement
We have also issued restricted stock and restricted stock units as part of our compensation structure.
In 1999, we issued to each executive officer then employed, including Mr. Goldberg, restricted stock that generally was non-transferable and was forfeitable if the recipient left the Company prior to the third anniversary of the grant. At that time, we also agreed to provide to each executive officer upon the lapse of the forfeiture risk on the restricted stock a tax gross-up benefit that would cover that executive’s tax liability associated with the restricted stock.
In 2000, we replaced the tax gross-up benefit with a grant of restricted stock units that vested (i.e., converted to transferable Common Stock) on the same day that the forfeiture risk on the restricted stock lapsed.
In 2002, the restrictions on transferability and the forfeiture provisions lapsed with respect to these shares of restricted stock, and the restricted stock units vested. In 2002, no executive officer was granted (i) restricted stock other than as a component of the annual bonus, or (ii) restricted stock units.
I think we are seeing that phenomenon in IDCC's increase in institutional holdings ;)
Good observation. I recall reading in a Forbes mutual fund survey earlier this year that more than $300B in mutual fund money follow the indexes. All we need is a very tiny portion of that "mechanical' money to keep on trickling into IDCC.
The Makeup of An Earnings Model
Live Headline
23-May-03
Sell side research analysts spend hundreds of hours a year tweaking and improving their earnings models, all in an effort to get it right. But get what right? Which are the important parts of the earnings model and how is one really built?
The Earnings
An earnings model will of course highlight the amount of earnings per share a company is expected to make in the coming quarters, but most analysts will tell you that that number is simply a calculation based on all the other numbers above the bottom line. So that number is really just a fluid part of what happens after revenue and expenses are netted out. The other major variable in the equation is the number of shares outstanding, which is more often than not a number that is provided by the company.
The Hardest Part of the Model, and the Most Important
The most important part of the model, and the hardest part to create is the top line, otherwise known as the revenue line. Most companies don't have a singular revenue stream, and if they do, there are surely several components from which it is comprised. What an analyst has to do, is look at how the company reports revenue and develop estimates for each revenue stream.
A fictional example would probably be best here, for the express purpose of keeping ideas in general terms. So let's say a company has three distinct revenue streams, each with their own line item when the company reports earnings. For each revenue stream, an entire spreadsheet (or possibly workbook) would be generated. It would likely break each quarter down into what would be most reasonable - that could be months or weeks or groups of weeks.
Analysts would employ every trick in the book to try to get the information needed to make their model work. But ultimately it comes down to following the segment of the market that he or she is covering with every bit of energy they have. Having a complete understanding of all the suppliers in the industry is key, as they will often give hints as to where their clients (the analysts' target company) are heading. Other things like trade publications and third party data providers will generally give information that will be integrated into a revenue forecast, but will likely hold little weight.
Working the phone is one of the best ways to get the important information an analyst needs to make revenue forecasts. Calling industry contacts or consultants and trying to get an overall feel for how the industry is doing is one of the best ways to forecast revenue. This certainly depends on the connections the analyst has, but there are always other ways of getting highly sensitive information. Paid surveys aren't used as much as they used to be, as employees have been trained not to tell company secrets since the introduction of Regulation FD (Full Disclosure), but they still provide some useful information.
When working closely with the company, the investor relations department might even do you the favor of giving you a contact at one of their major clients. When interviewing customers, analysts get an excellent feel as to why one product or service is doing better than another. They also try to find out who is in competition to replace the target company's goods or service. Customers are truly an invaluable resource and need to be rewarded for the information they provide.
Gauging the Costs
After an analyst has repeated the above process as many times as there are revenue streams, he or she can come to a final revenue number for the quarter. This revenue number will often be a guideline for the other line items, especially if it is a well established company where costs don't move around too much. After listening to industry contacts and doing the due diligence to find out what prices are doing, an analyst should have a good idea of where gross margins will be. If pricing has been strong (stable to rising prices), it is likely that margins will increase. If pricing has been weak, an analyst might model in lower gross margins.
An established company will generally have a fairly predictable cost structure. Nevertheless, most analysts will model out the number of employees and any other costs they can break out of the "SG&A" lines. The SG&A lines stands for Sales, General & Administrative. Promotion and Marketing expenses in the sales, or sales and marketing line, certainly provide for the most flexibility in making or breaking an earnings report. This line can provide a steep and sudden cut in order to make estimates.
All Important Guidance
While more and more companies are no longer offering the highly specific guidance they did in the past, certain companies still "coach" some analysts to where they would like to see estimates. Guidance is still a very important part of creating a model, as the target company has the best idea of anyone where most of the numbers will come in. The guidance is generated from a combination of how budgets are being spent and how results are coming along in the quarter.
The other side of guidance is that the analyst might feel he is getting low-balled by the company so that they can meet or beat estimates. Managing expectations is the job of the head of investor relations, and making sure that the consensus is reachable is his or her job. Often, they used to call analysts and try to persuade them that their estimates were too high. With Regulation FD limiting what companies can say to analysts, this practice is highly discouraged.
The Changes of Regulation FD
Regulation FD has changed the landscape significantly. Any changes in guidance must be given to all investors (or at least be made available to all investors) at once. Companies generally give guidance during earnings conference calls or during webcast events were everyone has access. Some companies go so far as to issue a press release that contains any of the guidance that may be repeated by senior management. Deep contacts within the industry probably still provide useful information to analysts, but it is getting harder and harder to gauge which employees at a company truly have a grasp of what is being spent and what is being earned.
In Summary
Models are very fluid things, as they are constantly changing and being updated. As the analyst learns more about the current economic conditions and competitive forces inside a specific industry, their model will be able to give a better snapshot of what the company is seeing. This, in turn, gives investors a good idea of what to expect in the future.
--Brian Bolan, Briefing.com
http://www.briefing.com
INTERDIGITAL (IDCC)
BEFORE & AFTER SETTLEMENT
Short Interest/Ownership Base
5/15/2002 to 4/13/2003
.
.
.
AVERAGE
DAILY SHARE SHORT INDIVIDUAL INSTITUTIONAL
VOLUME INTEREST INVESTORS INVESTORS
(Monthly) (Monthly) (Quarterly) (Quarterly)
.
.
.
05/15/2002 366,323 1.80M
06/14/2002 263,225 1.89M
06/30/2002 73% 17%
07/15/2002 287,599 2.08M
08/15/2002 277,592 2.32M
09/13/2002 210,278 2.67M
09/30/2002 68% 22%
10/15/2002 287,729 2.94M
11/15/2002 681,313 3.03M
12/13/2002 772,112 3.37M
12/30/2002 61% 29%
01/15/2003 616,953 3.27M
02/14/2003 537,789 3.82M
03/14/2003* 370,963 4.07M
03/30/2003 56% 34%
04/15/2003 1,951,616 5.13M
05/15/2003
06/15/2003
06/30/2003
.
.
.
*ERICY settlement
.
.
1)Assumption: Insiders/5+% holders constant at 10%
2)Source: Nasdaq
3) Note: DAYS TO COVER went from 10.9 days before
the settlement to 2.6 days after the settlement.
.
.
.
INTERDIGITAL (IDCC)
Selected Financial Data for Dummies
1995 to 2002
.
.
. Out-
Change Change Head- standing Avail.
Year O/S % R&D % Count Options Options
.
.
1995 46.5M - $ 9.7M - 183 4.0M 6.4M
1996 46.5M 0% 21.6M 122.3% 278 4.4M 5.6M
1997 48.2M 3.7% 24.2M 12.0% 205 6.0M 3.9M
1998 48.8M 1.2% 17.2M (28.9%) 215 5.8M 4.1M
1999 50.5M 3.5% 20.5M 19.2% 126 4.4M 3.8M
2000 57.3M 13.5% 26.0M 26.8% 191 5.9M 5.8M
2001 53.4M ( 6.8%) 44.5M 71.1% 319 10.6M 1.0M
2002 56.1M 5.1% 46.7M 4.9% 300 10.5M 1.9M
.
PROPOSED INCREASE (5M) 6.9M
.
From the Proxy Statement.....
.
In 2002, the Company made no initial, Company-wide,
or promotion related grants of stock options to any
of its executive officers.
.
As of the end of 2002, the percentage of stock
options outstanding held by executive officers
was approximately 18% of the total number of stock
options outstanding held by all option recipients
.
.
Note:
.
The average option package per employee went from
21,858 options per employee in 1995 to 35,000 options
per employee in 2002, or by approximately 60%.
.
The average R&D spent per employee went from
$53,000 per employee in 1995 to 155,667 per
employee in 2002, or by approximately 194%!
.
FOLLOW THE CASH
or how IDCC's management diluted its stock and looted the company from 1998 to 2002.
NOT!
.
INTERDIGITAL (IDCC)
Selected Financials
1998 to 2002
.
.
.
Total Cash Flow Net Proceeds
Diluted Operating from from option/ Cash/
O/S Expenses Operations warrant exer. Inv.
.
.
1998 48.8M $ 55.2M (215)* $ 30.1M $ 0.8M $ 52.2M
1999 50.5M 44.3M (126)* 27.7M 12.4M 83.2M
2000**57.3M 53.6M (191)* 5.3M 12.3M 89.0M
2001 53.4M 73.1M (319)* 9.6M 2.6M 90.0M
2002 56.2M 78.7M (300)* ( 2.6M) 12.3M 87.5M
.
Total $304.9M $ 40.4M
.
*Headcount
**SAB 101 implemented
.
Notes:
.
1) Cumulative R&D (1998-2002) - $154.9M (51% of Cumulative OPEX)
.
2) Cumulative Patent Administration (1998-2002) - $44.5M (15% of Cumulative OPEX).
.
Note the following:
1) IDCC entered the final stages of the Nokia
negotiations in late 1998 or early 1999 with
ONLY $52M in cash and 1998 total operating
expenses of $55M.
2) IDCC entered the final stages of the
Ericsson negotiations in early 2003 with
ONLY $88M in cash and 2002 total operating
expenses of $79M.
3) IF IDCC hadn't spent $151M in R&D from
1998 to 2002, they wouldn't have the higher
quality patent portfolio they have today.
You're right about the deteriorating quality of this board. 'Tis a pity, a pity it is! This used to be one of the most informative board in cyberspace back when Darrell was still around and the legal beagles were still pet detectives. LOL!
Please feel free to use the two IDCC boards on SI. The moderated board is for reference data (read: low volume, high quality). The public board is for chitchat (read: high volume, low quality) preferrably used by diligent everyday people who are not too dumb or too smart for their own good.<g>
Some poster had called Janet just after the proxy voting began, and according to the poster Janet indicated that the No votes were winning at that point. I don't remember who the poster was or exactly when it was posted, but I do remember the gist of that post
RMARCHMAN
Neo-nazis, eh? Is this why you keep on using BIG LIE tactics? This is beneath you! LOL.
Look, if the proxy voting just started then how can IDCC get any kind of unofficial result that the NO votes were winning? Why would they even release that kind of information that early?
This is obviously a fairly self-evident lie that you are only too willing to perpetuate to further your agenda.
This is kinda' like your use of the highly misleading study of 17 small cap tech companies to support your wild allegations of excessive compensation levels at IDCC. Or your use of 48M shares (1998) as the arbitrary and misleading baseline for measuring dilution when you know for a fact that IDCC spent nearly $250M from 1999 to 2002 in cumulative operating expenses
not fully covered by operating cash flow?
The ownership base of this company changes every trading day. That's why only the last proxy vote counts. Did you know that in the recent CA and HPQ proxy battles, new proxy votes were sent out every 7-10 days to account for the rapid changes in ownership?
You're on ignore. LOL.
From the DEF14A:
Only holders of record of shares of Common Stock at the close of business on April 21, 2003 are entitled to vote at the Annual Meeting or any adjournments or postponements of the Annual Meeting........................................A proxy may be revoked at any time before it is voted at the Annual Meeting.
Proxies may be revoked by timely delivery of (a) a timely notice of revocation in writing or by electronic transmission to the Corporate Secretary of the Company or the Company’s designated agent, (b) a properly executed, later-dated proxy, or (c) attending the Annual Meeting and voting in person (although attendance at the Annual Meeting will not, by itself, constitute a revocation of a proxy). To be eligible to vote in person at the Annual Meeting, a shareholder must be the registered owner of the shares or, if the shares are held in the name of a broker or bank, bring a legal proxy obtained from such broker or bank.
.....
LOL. I guess you're going to avoid answering the question even at the cost of your credibility going down even more.
Do you know how ridiculous and desperate you sound picking the all-time high -- which was reached during ONE trading session -- to support your questionable attacks on management? Try any useful combination of YTD, 1, 3 and 5 years. These are used by everybody. You can't fool all the people ALL the time!
Date Open High Low Close Volume
.
Dec-31-99 63.50 75.06 39.38 75.00 5,502,100
Dec-30-99 54.00 82.00 50.00 63.50 12,661,300
Dec-29-99 22.56 55.00 22.50 50.00 5,122,000
Dec-28-99 25.25 25.25 22.00 23.56 1,674,000
By the way, did you know that based on the proxy statement directors and officers as a group of 15 own 3.3M shares (6%) valued at $78M at today's close? Does this mean now that you're going to have the vapors every time an insider sells more than $1M worth of stock? LOL.
Answer the simple question instead of counting other people's money. Otherwise, don't waste my time.
Those who are obsessed with insider sales, options, etc. have as much chance of holding onto a volatile stock like this until it reaches its potential as someone who relies solely on technical analysis
Great advice worth taking. LOL. Astute observation too.
Many reasons to sell, only one reason to buy.
Answer this question, if you can:
If IDCC's insider activity is such a reliable indicator of future stock performance then how does one explain the fact that IDCC has outperformed 99% of the market during the last 2 1/2 years despite all the insider selling activity during the last 2 1/2 years?
Note that IDCC generated nearly $2.6M in cash from option/warrant exercises in 2001 and $12.3M in 2002. Since 1999 it has generated nearly $40M in cash from option/warrant exercises compared to more than $1B in market capitalization created.
That's a simple enough question for you.
perhaps by eating their computer screens as a way to vent and calm their passions before they spill and splatter yet again on this bloody board.
LOL. I doubt it, though. Too many people here appear to have too much angry blood to take the time to reflect on those things.
Take this simple question, for example, that none of the panicky even bother to address in their rush to articulate their latest doomsday scenarios.
If IDCC's insider activity is such a reliable indicator of future stock performance then how does one explain the fact that IDCC has outperformed 99% of the market during the last 2 1/2 years despite all the insider selling activity during the last 2 1/2 years?
Don't be one-dimensional.
The clear trend is the steady increase in institutional ownership and the steady decrease in individual ownership.
This is what many refer to as the change from weaker hands to
stronger hands.
Interdigital (IDCC)
.
.
Institutional Individual Insiders/
Quarter Owners Owners 5%+ Holders
.
06/30/2002 17.5% 72.5% 10.0%
09/30/2002 22.2% 67.8% 10.0%
12/31/2002 28.8% 61.2% 10.0%
03/31/2003* 33.5% 56.5% 10.0%
The bear raids on this stock are clearly aimed at the individual investors who obsess over everything. Institutions have more resources to compare executive compensation, dilution and IP contract terms. Clearly, those bear raids have shaken out more individual investors than institutional investors.
Actually most gains in the market seem to happen in the market between Oct and April....makes sense to take the summer off R^)
True, but everybody appears to have picked up on this seasonal market trend. That usually means....................<g>
Chat room junkies whip themselves into frenzies the instant they get wind of a sell.
Here we go again! LOL.
Insider Selling Rarely Defeats Winning Stock
By JONAH KERI
INVESTOR'S BUSINESS DAILY
November 9, 2000
Insider selling can trigger panic attacks with some investors. The sight of an exec dumping shares sends some antsy traders sprinting for their own sell button.
Not so fast. A CEO cashing in stock doesn't tell the whole story.
"Never, never, never base your decision on the singular event of an insider trade," said Bob Gabele, director of insider research at First Call/Thomson Financial. "You have to look at more pieces of information, at other pieces of the puzzle."
First Call is one of several services that track insider trading closely. In fact, you'd be hard-pressed to find even the smallest insider trades going by without a mention somewhere. News wires report them constantly. Chat room junkies whip themselves into frenzies the instant they get wind of a sell.
But insider sells could mean a lot of things, Gabele says. Kids' college tuition and luxury cars don't come cheap.
Neither does retirement. An executive winding down his career may start his estate planning by cashing in shares. You'll often see large sells from such execs even while other insiders are buying stock, Gabele says.
Some big cheeses sell stock on a regular basis. Microsoft Chairman Bill Gates and Dell Computer CEO Michael Dell both do. They might be diversifying their holdings, or they could have other reasons.
"We all know about Gates' house," said Gabele, referring to the Microsoft head's palatial estate outside Seattle. "I'm sure that took a few shares to build."
Insiders rarely have the inside track on timing. Check out Cisco Systems. The stock shot out of a base in November 1998. Two weeks later, insiders unloaded a million shares (point 1 in graphic). Barely flinching, Cisco continued its run-up.
Starting in January 1999, the stock moved sideways for several weeks. Insiders cashed in another million shares in early March (point 2).
The selling continued all the way through the stock's run-up. But Cisco didn't take notice. It jumped nearly fivefold from its November 1998 breakout to its peak in March of this year.
You'll find plenty of better sell signs if you know where to look. For instance, sales and earnings growth could start to slow. More often, though, technical signs will precede fundamental ones. Some stocks will rocket up on huge volume in the final stages of a run-up, signaling a climax top.
They may gap higher in the last days of that run. That's an exhaustion gap, telling you your stock may be out of gas.
Look out for stocks moving higher on lower volume. They may lack the institutional muscle needed to push them to new heights. Without that support, your stock could fall quickly.
Beware of failed breakouts, too. A stock may look great blasting out a base. But if it drops back into its base, something's wrong. It may be time to sell.
At least IDCC is ahead of us......
I am pleased to appoint Charlie Brogan to the position of Senior Director of Corporate Development," said Rich Fagan, Chief Financial Officer of InterDigital. "With more than twenty years of senior level mergers and acquisitions experience, Charlie will lead InterDigital's corporate development activities at a time of positive momentum for the Company.
By creating this position, the Company is accelerating its growth possibilities, enhancing its ability to penetrate new markets, providing InterDigital with access to a broader range of technologies and products to offer to its customers, and strengthening the Company's ability to increase shareholder value."
IDCC's participation in standards is also a way to scope out new products and trends.
Company management and engineers have or are currently serving in a number of leadership positions in key industry standards bodies including Chair of the IEEE 802.16 Tga (Broadband Wireless Access, 2-11GHz); Chair of the 802.16 Mobile Study Group; Vice Chair of the 3GPP RAN Working Group 3 (WG3); Vice Chair of T1P1.4 Wireless Wideband Internet Access; North American Rapporteur for ITU-R IMT-2000 Deployment Handbook; Editor, 3GPP RAN WG1, Physical Layer Procedures (TDD) (R5) and Editor and Rapporteur, 3GPP RAN WG4, TDD Base Station Classification
BTW, have you ever owned shares in a stock that has grown from less than $100M in sales to more than $1B?
I don't think so.