InterDigital Inc (IDCC)

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DCC Interdigital Comm started with a Buy at IRG, tgt $27 (17.04 -0.13)

IRG initiates coverage of InterDigital Communications with Buy rating and $27 price target. With many leading wireless OEMs as licensees, the company is well-positioned to benefit from wireless-industry spending as it transitions from 2G to 3G platforms. Catalysts include favorable arbitration resolution with Nokia and Samsung, share gains by current licensees, signing additional licensees, and market acceptance of a full W-CDMA (3G) solution. Firms $27 price target is based on a blended multiple of 2005E EPS. With only one direct comparable (Qualcomm), a peer-group valuation is not possible. InterDigital has a solid balance sheet, with $1.80 in cash per share and little debt. Also, its products typically carry 100% gross margins.