Replies to post #239383 on InterDigital Inc (IDCC)

[Desert dweller]

Isn't it amazing that the street still doesn't believe these numbers? Your analysis is simple and to the point. Considering we are recognizing $57 million/year from LG, the conservative numbers you posted should be easily doable with the market share Sammy and Nokia have compared with LG. Why isn't the street seeing this yet? I guess they feel like Charlie Brown and Lucy due to the many years of Lucy pulling the ball away too many times to go out on a limb and project the numbers you are. They are acting as if they are all from Missouri and need to be shown before going out on a limb. I know a little part of me feels the same way but only a little.

The signing of Sammy at this point in this market has taken away the downside risk IMO at these levels. Had the stock jumped to $40, I believe there could be some risk but in the mid 20's, there isn't any IMO. The only way the stock is worth only $25 today is if somehow management totally gave away the farm to induce Sammy to sign and I don't believe they did that. I doubt if they are going to get anywhere near $2 bucks a phone from them like some here believe but even at $.75-1.00 (which is my estimate fwiw) the numbers are huge and the impact to EPS is great as you pointed out.

Message In Reply To:
I have been doing a little math to past the time. IDCC's income in 2007 was 234M. Operations aprox 211M. Let's say Nok will be done soon and litigation cost goes away. Litigation cost for 07 was aprox 24M. Subtract that from Operating and you have 187M. 234M-187M = 47M. Here is where the fun begins. Add in a conservative 100M for Sam and 200M for Nok you get 47M + 100M + 200M= 347M *.35 for taxes= 121.45. 347M - 121.45= 225.55M/44M= 5.12 eps. A multiple of 10= $50, 15=$75, 20=$100. Now you throw in Mot & Eric for another 1 eps the pps goes to $60, $80, $120. I tink my estimates are very consevative as I truly believe eps after taxes will be closer to $8 eps based on WCDMA and CDMA units sold in 2009 and closer to $14 eps by 2012.

[mickeybritt]

Did you pay taxes on the gross revenues, or after expenses and the taxes?

Mickey

[The Count]

Ellismd - a very good analysis

I think it is quite reasonable, not optimistic or conservative. I was about to do a similar post but yours is almost the same. I am thinking that Samsung, Nokia and Sony/Ericssom should be done by Q4 2009.

A couple of minor points. Add $10 -$20 dollars a share for cash on hand, depending on the amounts of prepayments and 2G. I wouldn't assume the expense reduction for legal costs as I'm sure a company flush with funds and success will have other expenses rise.

To be conservative, cut your $5 per share in half and use an ultra consevative estimate of a 10 PE and you have a $25 share price.

So what I see here is a stock that, with mediocre execution, should be selling for $40 - $50 per share within two years. With decent to good agreements, the Houston 100 will be a reality within that time frame. (Aside to Ed F, you had a "gut" feeling of no good news, which, if correct, would've caused IDCC to fall 50% or more, yet after you're rendered "gutless" by the results, you have the audacity to post about how you sold your investments in September except for this little stock that you have consistently belittled. So are a liar or an idiot?)

So what does this all mean to me as an investor? I've gone to 110% invested in IDCC, using margin. I see very limited downside risk, good to great upside. The current weakness in the overall market, combined with the street's lack of respect for IDCC's future prospects, and possibly some manipulation by the shorts to exit ahead of the run has given everyone one last (I hope) fantastic buying opportunity. So my advice is to take any dry powder and buy now. I do not recommend going on margin or buying options as delays and volatility can result in you being right and still losing. For those of us that have been compulsively following this stock for years, this is the opportunity. We understand what the company has, what the risks are, the potential rewards. Now is chance to put all that DD to work.

No need to wish everyone luck. When you study, analyze and take action on your knowledge, success will follow. 2009 will be IDCC's "next year" that we've all been waiting for.

Happy Thanksgiving everyone.

[enyaw]

Good analysis and you are being conservative. One thing that you might want to incorporate in your figures for comparison is the product development expense money IDCC spent in 2007. I think those numbers were as significant as the legal fees from what I recall. Also selling the chip unit for $100 million. No matter which way you slice it, within one year we should be at $100+.