InterDigital Inc (IDCC)

[The Count]

Welcome wallstrpro

Da-yumm. I've been addictively following this stock and JimLur's message boards on IDCC for almost 4 years now. Yet you've quickly and succinctly summarized my feelings on IDCC in a few short sentences, including the appropriate recognition of the potential downside. If anyone asks why they should invest in IDCC, I can point them to your post for the Reader's Digest version. Bill Dalglish and Rmarchma have written reference materials for those interested in further reading.

I guess the prospect of earning $2-$3 per share in 2005-2006 was a key factor in my decision to invest in IDCC. To be conservative, if you put 20x on FY05 earnings of say $2, you get $40. So the upside potential here is tremendous. So why is the stock valued the way it is now? because the Street hates uncertainty. I would also venture to add that perhaps the Street expected IDCC to sign up a couple more licensees since the ERICY settlement last March. However, lets not forget that prior to the NOK arbitration announcement, IDCC was trading at $28 with expectations that it would hit $35 by year-end.

So to sum it up, IMHO there are very few opportunities similar to IDCC in terms of upside potential. Is it possible for the stock to go down. Absolutely. Is it possible to languish in a tight trading range. Sure. Still, long term (in my book 2-3 years), patient investors will be rewarded handsomely.