InterDigital, Inc. (IDCC)

No debt and a lot of cash on the balance sheet. 1000 patents, huge revenue growth expected in the next several years. Great Value Play.

IDCC (InterDigital Inc.)
InterDigital is a technology vendor to cell phone companies, along with other devices that use IEEE wireless communication, and license out the patents they have to these customers. They have over 3,000 patents, with nearly 9,000 more in process. This is a huge growth area as according to their last conference call, wireless data traffic is expected to grow ten-fold over the next 5 years (think youtube videos on cellphones). They are working on developing solutions for the bandwidth crunch that is happening.

This past quarter they grew revenues a full 37%, and earnings by 232%! Since they are indeed highly profitable, you would think a high premium would have to be paid for this type of growth along with their vast portfolio of patents. Fortunately this is not so. This stock is trading at 19 times trailing earnings and just 7 times forward estimates! Analyst have been bumping up their estimates over the past 90 days, and are predicting an average of 21% per annum growth for the next 5 years. If they are even close with these estimates, this stock is not going to be trading at just 7 times those earnings.

Furthermore, this company is SOOO ridiculously cheap because on their $957 million market cap, they have $430 million in cash and virtually no debt! Management has already proven they are shareholder friendly since in March they authorized a $100 million stock buyback and have purchased about a million shares already with this.

Listen to the conference call that happened on October 29th. About 4/5ths the way through it gets funny, and then real serious. The analyst's first words are "oh sh*it" as he thought he was disconnected from the call, then later... well, lets just say it's not the last time you'll hear the word "sh*it!" or "my God!") in the CC. He makes some great points on how ridiculously cheap this company is and that management should be spending everything they can on repurchasing as much as this company as they can vs. earning a measly 0.5% to 1% on their cash holdings.

RK

Low relative PE, good chart, star ratings & 2010 earnings. Bottom fishing week of 10/26.

Oversold even though the stock has great fundamentals.

Due for a bounce as others mention. Nokia is not the start of some domino effect. They have signed other licensees since the first drop on this news in August.

Grossly oversold due to market jitters over a patent dispute,as traders have their fingers on the triggers more than ever these days. Core business looks fine but the news could keep it volatile enough to get a good entry position. Often beats estimates and if my calculentos battery is working right ,then company just beat last years 2nd quarter results by 350%, ROE 28% on this little cash machine,and thats in the middle of the world coming to an end. One has to wonder what might happen if the earth is still here in a year or two. Fellow fool TMFDitty already covered enough of the reasons to further research this money printing machine. One to watch!

I get $67M for trailing free cash flow, and an average of $99M per year over the last five years. On the one hand, I don't like seeing the number decline. On the other, we're talking somewhere between 7x and 10x FCF for a projected 18% grower here, folks -- and that's not even figuring the cash stash into the equation. This company is insanely undervalued, swimming in cash, and making more of it every day. (And Nokia? Who's Nokia? Didn't they used to make cellphones before the iPhone was invented?)

Pick on a dip

new contracts should push the earnings and growth much higher

Revenue & Profit growth. Sector growth.

Looks bouncy and near a support level... catching it on the way back up, speculatively speaking.

Technology moat with well defined product used by the masses.

Mmm...wireless technologies...

IDCC is a profitable company with growing revenues.

Looks expensive now but could look cheap in the medium term!

PEG = 0.60

Underperform strictly based on what I see as too high of a P/E. I have learned in the past that this CAN be a good indicator of an overpriced stock.

IDCC has been rangebound for some time. The key points are as follows: Nearly every major cellphone maker pays IDCC royalties for each handset sold. Samsung has recently signed. Nokia and Sony Ericsson are the last holdouts. Reasonable expectations include revenue up 10% and net income up by even more. I expect $35 p/s by year-end

Should see some M&A activity in the tech sector and this company has a high likelihood of being a target.