Replies to post #248564 on InterDigital Inc (IDCC)

[Grones]

The Count: Great Post!

[JimLur]

Count , great post and a great understanding of Carpenter's thoughts.

[Danny Detail]

Count .. Outstanding post .. one of your very best and you have had a lot of good ones over the years. Maybe Tom is right and maybe he is wrong. But, unlike we on this board who make predictions, TC will have to live with the consequences of his in terms of his career.

MO,
Danny

[olddog967]

Count: Since we don't know the basis for the change from a Buy rating to a Neutral rating we can only make assumptions. Like you, I assume it is probably related to the increase in the stock price. However, based on the firm's rating criteria I would say that the change was premature.

Playing with numbers, I come up with a little different conclusion regarding potential appreciation potentials. The analysis was dated 20 January, The range of closing prices from Jan 1 - Jan 16 (last trading day before report) was $26.73 low - $28.11 high with average around $27.27. An increase in price to $39 would be $11.73, or approximately 43%. At yesterday's closing price of $33.33, $6.06 (or 51%) of the potential appreciation occurred. Therefore approximately 50% of the original projected potential return was still available.

The reason I use this exercise is that if you use the firm's criteria for rating stocks, unless something else besides the price has changed, a change to a Neutral rating does not seem to be proper. (see highlighed portion below)


"Investment Ratings

Buy - We believe the stock has significant total return potential in the coming 12 months.

Long-term Buy - We believe the stock is an above average holding in its sector, and expect solid returns to be realized over a longer time frame than our Buy rated issues.
Neutral - We believe the stock is an average holding in its sector, is currently fully valued, and may be used as a source of funds if better opportunities arise.

Underperform - We believe the stock is vulnerable to a price set back in the next 12 months."


I will now go into ulterior motive mode. Since according to the report "The author of this report or members of his household have a long position in the common stock of InterDigital Communications, but may not engage in buying or selling contrary to the recommendation." maybe he would like to do some selling at around current prices, but cannot do this while still rated a "buy".

All the above is just my playing with numbers and JMHO.

[nicmar]

Count... I tend to agree with most of your post, but tend to disagree in this respect and then I will qualify my statement. I find it troubling that an upgrade was made 2 weeks ago and now a downgrade in such a short time. Yourself and a few others, I think, have stated that you feel the downgrade was made primariily because of a jump in share price ($27.61 to $33.33) that has likely given the analyst the impetus to re-evaluate the rating since the projection of $39 was for the entire year. That's a $5.72 increase or 20.7% which is not even close to a 50% increase as stated. I took my figures from January 20 to the close yesterday.

If an abrupt increase or decrease in share price results in an upgrade or a downgrade, then you're esentially saying Carpenter will come out with another upgrade in a week perchance the stock again falls to $27. I don't believe that at all. Upgrading and downgrading in a few weeks could go on forever the way idcc jumps back and forth.

I don't think Carpenter or any other analyst would attempt to micro manage a stock and if it has to do with price alone, then I would call it micro managing. If we dropped $2 tomorrow, then the increase would be only 13% which isn't unlikely at all. What would he do? Make all haste in cancelling the downgrade.

I would rather believe TC has heard or knows something that tends to make him believe that idcc may not sign nokia until the end of this or next year or perhaps he thinks nokia will go to the end and take it to Deleware. Just pure speculation and only an example, but I believe Carpenter has a more valid reason than a price swing.

"Tom provides his thorough professional research on IDCC to Jim for this board as a courtesy." With this statement I couldn't agree more and that is why I give Tom Carpenter more credit as I believe he has more of a valid reason for the downgrade than a mere 20% price swing. We will see when he issues the downgrade, I hope.

By the way, I'm just disagreeing with you on that minor point. I feel yours was an excellent post and I agree that we should value our analyst, however, I believe we need to evaluate his statements. I do believe he has been most helpful to us through JimLur and I hope he continues to follow idcc. I have been using his figures closely for my estimates because I feel he has a good handle on idcc's progress. .. mo... nic

Btw Count, keep that thinking cap on old fellow as I'm beginning to advance in age myself and won't be able to hold you up forever. Ah!! you know I'm just kidding. You wouldn't want the whole board to agree with you all 100% anyway. Would make you hard to get along with the other half. Take care... nic

[nokiashill]

the only analyst i want to hear from is -PJ-

[MJPLIFE11]

Hey count go and reread carpenter's report from 2 whole weeks ago. He mentioned numerous reasons why he raised his rating to a buy. He also stated that most of the risks were removed from the stock with the samsung signing. I don't need him to pump the stock the fundamentals will take care of the stock price. Since you're such a defender of Mr. Carpenter tell me why he didn't upgrade when we dropped 10 bucks a share for no apparent reason? He's very quick to downgrade on a lousy 5 increase in price after the co. signs the biggest deal in their history. If that makes sense to you, you're more naive then I thought. Excuse me for using whole instead of hole I was pissed at the time I wrote that. I do have a college degree and I can read.