Mr. Carpenter’s logic (for the mathematically challenged)
we discount the $45 back one year to account for using a 2010 EPS estimate, which entails dividing $45 by our estimate of InterDigital’s cost of capital (we use 15%). This yields a $39 one year price target.
As he stated, he took his projected share price of $45 at the end of 2010 and divided it by 1.15 to arrive at his end of 2009 target of $39. If you apply the same calculation to get to the current price, you would divide 39 by 1.15 to get to the 1/1/09 value, then add 1.25% for the one month of current year appreciation and you get about 34.33, or about $1.00 above the price when he went to neutral. Seems logical to me to rate a stock neutral that is trading at 97% of the computed fair value.
Personally I believe his projected share price of $45 at the end of 2010 is at least 20% too low and I personally still have IDCC as a strong buy. I see at least $3.50 of earnings and a multiple of at least 15 plus cash on hand at the end of 2010. So I disagree with him. That does not mean that he has an agenda or that he is an idiot. He lays out his revenue and expense numbers, applies a PE and discounts it to current value. When the stock price approaches his current value he rates it neutral. When it is lower he rates it a buy. But because the price ran a quick $6 and he is actually paying close enough attention to make timely changes to his rating, some say he must be playing Jim. Because he is not as optimistic as I am, some say he is stupid and manipulating the stock. Absolutely mind boggling. Dispute the substance of his estimates and come up with your own valuation, but don’t just bitch because he isn’t pumping the stock the way you want.
Jim is an honest man that does his best to run this board for investors to stay informed about IDCC. He gets access to valuable information that others, like the revered teecee, could never get. It is unbelievable to me how so many folks feel no shame in benefiting from the incredible knowledge base here then pissing all over Jim because he doesn’t run the board to their liking. Please feel free to go elsewhere for your information – you won’t be missed here. At the very least, shut the f up about how Jim runs the board. If someone treats you to a ball game, don’t bitch because the beer isn’t cold enough. The complainers rarely contribute substance and most are free members. They love to talk about being loyal to IDCC, a truly idiotic notion. I am loyal to Jim Lurgio because he has provided a great resource and been a faithful steward of the various boards he’s managed over the years. He might make mistakes, but he is always striving to do his best. He gets no pay, no bonus, no options. Just an occasional thank you mixed in with the frequent complaints. So if you’re not happy here, please go to Atomic Bob's, where the most discussed topic is how bad IHub is. You’ll fit right in.
Frank
