InterDigital Inc (IDCC)

[The Count]

Mschere, what is your EPS multiple? TIA

Currently IDCC's Trailing earnings are $1.20/$1.21 per share..on August 3, the Financial Services will change that figure to no less than $4.04..Every one is free to provide their own EPS multiple for IDCC stock at that point in time..

If you believe the market is going to, or even should, place a multiple on the total earnings instead of the expected recurring earnings, then there are scores of stocks out there that are quite a bargain. However if you understand that investors buy the stock based on their expectations for the future, then you know that IDCC will be priced at a multiple of the expected recurring earnings (primarily 3G).

It's wonderful to have a positive outlook on life, but it can be detrimental when the positive spin might cause someone lacking market savvy to believe the stock is undervalued due to it's low PE based on GAAP earnings that include large "one off" revenues. I believe IDCC is undervalued because they will sign other large producers to 3G contracts to bring their recurring earnings up. If they don't, then that $4 a share earnings will not support a PE of 6 a year from now.