Holy Sh*t, Batman! Great input from Bill Nasgovitz
I finally got a chance to listen to the conference call, and I loved the contribution from s-kicking Heartland analyst, Bill Nasgovitz. I completely agree with him and hope that IDCC seriously considers what he said. At $20 a share IDCC is woefully undervalued unless there is doubt about IDCC's ability to license going forward. Per management, licensing will not be materially impacted by the ITC decision. If earnings are solid and expected to increase, given the large amount of deferred revenue and IDCCs statements about licensing, there is no way the share price will stay this low when the street believes it. As Bill N said so eloquently, "or are we just bs'ing here". So IDCC should be buying with both hands NOW. Many of us shareholders don't have the cash to buy more shares, but would love to use some of the cash we hold indirectly through our investment in IDCC to buy IDCC stock. Decrease float = higher EPS, which will lead to a higher share price in the long term.
His example of using $200MM to buy 25% of the shares was startling. I also agreed with his comment about moving away from the core business model. Execute on licensing and keep building the patent portfolio. Personally I don't give a rat's ass about officers buying stock individually. That won't make me any money when the price goes up.
He also suggested a dividend to make the stock attractive to a whole new segment of investors. Given the huge cash balance and expected positive cash flow, they could easily manage an ongoing $1 per share dividend in addition to completing the buyback. One time dividends are pointless, as it will not bring investors to this company. But a regular dividend is a very important criterion for many investors.
I also loved the passion Bill N exhibited on the call. I like the way he pointed out how IDCC is so drastically undervalued at these levels. I hope he inspires some enthusiasm in IDCCs management and they can see the common sense in the substance of his comments. If they don’t do some significant buying at these levels recognizing the great opportunity to reduce float at a very cheap price, there’s only one thing I can say, quoting my new favorite analyst, “Holy shit! You’re talking about a pretty optimistic future here. Am I wrong, or are we just bs’ing here.”
