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GuruFocus Financial Strength Rank measures how strong a company’s financial situation is. It is based on these factors

1. The debt burden that the company has as measured by its Interest coverage (current year).
2. Debt to revenue ratio. The lower, the better
3. Altman Z-score.

A company ranks high with financial strength is likely to withstand any business slowdowns and recessions.

Financial Strength : 5/10

vs
industry
vs
history
Cash to Debt 3.35
IDCC's Cash to Debt is ranked higher than
83% of the 800 Companies
in the Global Telecom Services industry.

( Industry Median: 0.40 vs. IDCC: 3.35 )
IDCC' s 10-Year Cash to Debt Range
Min: 2.4   Max: 1157.41
Current: 3.35

2.4
1157.41
Equity to Asset 0.48
IDCC's Equity to Asset is ranked higher than
79% of the 792 Companies
in the Global Telecom Services industry.

( Industry Median: 0.40 vs. IDCC: 0.48 )
IDCC' s 10-Year Equity to Asset Range
Min: 0.19   Max: 0.87
Current: 0.48

0.19
0.87
F-Score: 6
Z-Score: 3.45
M-Score: -3.31
GuruFocus Profitability Rank ranks how profitable a company is and how likely the company’s business will stay that way. It is based on these factors:

1. Operating Margin
2. Trend of the Operating Margin (5-year average). The company with an uptrend profit margin has a higher rank.
••3. Consistency of the profitability
4. Piotroski F-Score
5. Predictability Rank•

The maximum rank is 10. A rank of 7 or higher means a higher profitability and may stay that way. A rank of 3 or lower indicates that the company has had trouble to make a profit.

Profitability Rank is not directly related to the Financial Strength Rank. But if a company is consistently profitable, its financial strength will be stronger.

Profitability & Growth : 9/10

vs
industry
vs
history
Operating margin (%) 26.05
IDCC's Operating margin (%) is ranked higher than
95% of the 788 Companies
in the Global Telecom Services industry.

( Industry Median: 12.85 vs. IDCC: 26.05 )
IDCC' s 10-Year Operating margin (%) Range
Min: -72.02   Max: 70.02
Current: 26.05

-72.02
70.02
Net-margin (%) 11.73
IDCC's Net-margin (%) is ranked higher than
88% of the 788 Companies
in the Global Telecom Services industry.

( Industry Median: 6.98 vs. IDCC: 11.73 )
IDCC' s 10-Year Net-margin (%) Range
Min: -84.71   Max: 46.88
Current: 11.73

-84.71
46.88
ROE (%) 7.22
IDCC's ROE (%) is ranked higher than
73% of the 762 Companies
in the Global Telecom Services industry.

( Industry Median: 12.18 vs. IDCC: 7.22 )
IDCC' s 10-Year ROE (%) Range
Min: -94.63   Max: 81.76
Current: 7.22

-94.63
81.76
ROA (%) 3.43
IDCC's ROA (%) is ranked higher than
74% of the 792 Companies
in the Global Telecom Services industry.

( Industry Median: 4.69 vs. IDCC: 3.43 )
IDCC' s 10-Year ROA (%) Range
Min: -49.38   Max: 41.59
Current: 3.43

-49.38
41.59
ROC (Joel Greenblatt) (%) 201.03
IDCC's ROC (Joel Greenblatt) (%) is ranked higher than
96% of the 784 Companies
in the Global Telecom Services industry.

( Industry Median: 22.49 vs. IDCC: 201.03 )
IDCC' s 10-Year ROC (Joel Greenblatt) (%) Range
Min: -206.28   Max: 2826.86
Current: 201.03

-206.28
2826.86
Revenue Growth (%) -3.70
IDCC's Revenue Growth (%) is ranked higher than
71% of the 680 Companies
in the Global Telecom Services industry.

( Industry Median: 3.70 vs. IDCC: -3.70 )
IDCC' s 10-Year Revenue Growth (%) Range
Min: -21.6   Max: 64.9
Current: -3.7

-21.6
64.9
EBITDA Growth (%) -21.10
IDCC's EBITDA Growth (%) is ranked higher than
67% of the 606 Companies
in the Global Telecom Services industry.

( Industry Median: 1.70 vs. IDCC: -21.10 )
IDCC' s 10-Year EBITDA Growth (%) Range
Min: -21.3   Max: 116.2
Current: -21.1

-21.3
116.2
EPS Growth (%) -35.50
IDCC's EPS Growth (%) is ranked higher than
66% of the 545 Companies
in the Global Telecom Services industry.

( Industry Median: 0.20 vs. IDCC: -35.50 )
IDCC' s 10-Year EPS Growth (%) Range
Min: 0   Max: 188.4
Current: -35.5

0
188.4
» IDCC's 10-Y Financials

Financials


Revenue & Net Income
Cash & Debt
Oprt. Cash Flow & Free Cash Flow

» Details

Guru Trades

Q2 2013

IDCC Guru Trades in Q2 2013

John Hussman 100,000 sh (New)
Steven Cohen 9,524 sh (New)
Chuck Royce 15,500 sh (New)
FPA Capital Fund 920,648 sh (unchged)
John Paulson 2,979,400 sh (-0.69%)
First Pacific Advisors 1,989,648 sh (-1.06%)
Jim Simons 252,293 sh (-8.55%)
Joel Greenblatt 62,874 sh (-53.24%)
» More
Q3 2013

IDCC Guru Trades in Q3 2013

Paul Tudor Jones 8,000 sh (New)
Zeke Ashton 82,500 sh (New)
Joel Greenblatt 128,425 sh (+104.26%)
Jim Simons 338,393 sh (+34.13%)
Chuck Royce 20,000 sh (+29.03%)
John Paulson 2,979,400 sh (unchged)
FPA Capital Fund 920,648 sh (unchged)
John Hussman Sold Out
First Pacific Advisors 1,926,248 sh (-3.19%)
Steven Cohen 8,870 sh (-6.87%)
» More
Q4 2013

IDCC Guru Trades in Q4 2013

David Dreman 1,009 sh (New)
Third Avenue Management 781,611 sh (New)
Steven Cohen 19,712 sh (+122.23%)
Paul Tudor Jones 16,192 sh (+102.4%)
Jim Simons 611,093 sh (+80.59%)
Zeke Ashton 135,000 sh (+63.64%)
Joel Greenblatt 207,771 sh (+61.78%)
First Pacific Advisors 2,267,100 sh (+17.7%)
FPA Capital Fund 1,060,800 sh (+15.22%)
Chuck Royce 20,000 sh (unchged)
John Paulson 1,630,000 sh (-45.29%)
» More
Q1 2014

IDCC Guru Trades in Q1 2014

FPA Capital Fund 1,176,200 sh (+10.88%)
» More
» Details

Insider Trades

Latest Guru Trades with IDCC

GuruDate Trades Impact to Portfolio Price Range * (?) Current Price Change from Average Current Shares
FPA Capital Fund 2014-03-31 Add 10.88%0.41%$26.47 - $33.08 $ 33.5913%1176200
FPA Capital Fund 2013-12-31 Add 15.22%0.48%$28.72 - $38.731 $ 33.59-1%1060800
John Paulson 2013-12-31 Reduce -45.29%0.33%$28.72 - $38.731 $ 33.59-1%1630000
Joel Greenblatt 2013-12-31 Add 61.78%0.06%$28.72 - $38.731 $ 33.59-1%207771
David Dreman 2013-12-31 New Buy$28.72 - $38.731 $ 33.59-1%1009
John Hussman 2013-09-30 Sold Out 0.2%$35.48 - $41.03 $ 33.59-11%0
Joel Greenblatt 2013-09-30 Add 104.26%0.08%$35.48 - $41.03 $ 33.59-11%128425
John Hussman 2013-06-30 New Buy0.2%$40.04 - $47.69 $ 33.59-25%100000
Joel Greenblatt 2013-06-30 Reduce -53.24%0.18%$40.04 - $47.69 $ 33.59-25%62874
Joel Greenblatt 2012-12-31 Add 20.68%0.05%$34.02 - $45.05 $ 33.59-16%127636
John Hussman 2012-09-30 Sold Out 0.34%$25.45 - $37.15 $ 33.598%0
John Paulson 2012-09-30 Reduce -25%0.25%$25.45 - $37.15 $ 33.598%3000000
Joel Greenblatt 2012-09-30 Reduce -50.39%0.23%$25.45 - $37.15 $ 33.598%105760
FPA Capital Fund 2012-06-30 Add 77.15%1.48%$22.54 - $35 $ 33.5920%920648
Joel Greenblatt 2012-06-30 Add 29.87%0.11%$22.54 - $35 $ 33.5920%213186
FPA Capital Fund 2012-03-31 Add 470.11%1.65%$35.07 - $46.09 $ 33.59-8%519700
Joel Greenblatt 2012-03-31 Add 128.51%0.28%$35.07 - $46.09 $ 33.59-8%164159
John Paulson 2012-03-31 Add 35.61%0.24%$35.07 - $46.09 $ 33.59-8%4000000
Joel Greenblatt 2011-12-31 Reduce -23.81%0.17%$39.05 - $52.08 $ 33.59-25%71839
John Hussman 2011-12-31 Add 21.6%0.07%$39.05 - $52.08 $ 33.59-25%608000
John Paulson 2011-09-30 New Buy0.68%$41.51 - $74.27 $ 33.59-46%3000000
Joel Greenblatt 2011-09-30 Reduce -52.94%0.61%$41.51 - $74.27 $ 33.59-46%94291
John Hussman 2011-09-30 Add 138.1%0.21%$41.51 - $74.27 $ 33.59-46%500000
Joel Greenblatt 2011-06-30 Add 405.27%0.92%$35.02 - $49.11 $ 33.59-21%200370
FPA Capital Fund 2011-06-30 New Buy0.4%$35.02 - $49.11 $ 33.59-21%91158
Joel Greenblatt 2011-03-31 Reduce -77.84%2%$41.63 - $58.25 $ 33.59-30%39656
John Hussman 2011-03-31 Add 59.09%0.06%$41.63 - $58.25 $ 33.59-30%210000
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Guru Investment Theses on InterDigital Inc

FPA Capital Comments on InterDigital - Jan 27, 2014

The most disappointing investment in the portfolio for 2013 was InterDigital (IDCC). This stock declined approximately 28% during the year, despite posting roughly 25% operating margins. Our thesis on IDCC is that the company should benefit from its wireless technology patents as more smartphones and mobile tablets are connected to the in ternet. IDCC creates wireless technology, applies for patents for the technology it creates, and then licenses its technology to manufacturers who produce the aforementioned products. In the past, Nokia, Samsung, Apple, LG, and many other manufacturers hav e licensed the company's technology to use in their products and paid IDCC royalties.

Typically, in the past, IDCC would receive royalty payments fixed for a certain period of time, for example four years, and then its customers would renew its license fo r another period of time and likely with some additional patents thrown into the agreement. However, as IDCC switched to receiving a royalty on a per unit sold basis and the number of smart phone units sold worldwide has exploded to the upside over the pas t couple of years, some of the company's traditional customers have chosen not to sign new license agreements and pay IDCC. The failure to pay, but still use IDCC's essential patents in the manufacturer's products has prompted IDCC to sue some of its large st customers.

Suing your customers is not an ideal business strategy, but one, unfortunately, that is all too commonly deployed in the technology industry. These lawsuits are not only expensive, but also can drag on for years as the suits wind their way t hrough both the International Trade Commission and the Federal Circuit. At the end of the day, IDCC has prevailed in prior lawsuits and won large judgments or settled with the likes of Nokia and Samsung. Most investors do not have the patience to withstand all of the ups and downs of the legal process. When there are temporary setbacks to IDCC's legal process, investors sell their stock, and this is what we believe largely transpired in 2013.

However, we do not view the prospects of a legal victory as the only means to the success of IDCC. In fact, the company can monetize its patent portfolio by selling non - core patents to other companies. For example, in 2012, Intel paid IDCC $375 million for a couple of hundred patents, out of a portfolio of over 20,000 patents. IDCC can also enter into joint venture agreements, such as the agreement signed with Sony in 2013, to generate value for shareholders. Instead of suing its potential licensees, IDCC can enter into binding arbitration with manufacturers. 

Moreover, IDCC has not ruled out eventually developing products employing its patents, and then selling these products to its customers rather than licensing them the technology. Thus, there are multiple ways for IDCC to get paid for the value it creates, and it does not have to be a binary situation as some ill - informed investors might believe.

The one risk that we need to watch closely in the coming months and quarters is the political risk. There is some discussion is Washington about the merits of pate nts in our fast - changing, technologically - advanced society. Some people will argue that patents do not have as much value today as in the past. Their reasoning is that product life cycles are much faster today and new things are always being created to rep lace the older generation of products. However, perhaps the life cycle of products is shortening because there is payoff to those who create the technology in the first place. If inventors and scientists are not paid for the stuff they create, what is the incentive to create the new technology? Our view is that inventors, musicians, writers, and scientists should have their new ideas and products protected from being copied for a reasonable period of time, and get paid a royalty should someone or a company want to use their creation. However, we need to be cognizant that our opinion could be refuted in a political environment that has a different agenda. While the risk of a massive overhaul of our patent laws is small, we cannot fully discount it occurring.

Thus, we will be diligent in adding to our IDCC position and ask for an extra discount before buying more shares. The company's balance sheet remains exceptionally strong with about half of the company's market value consisting of its net cash position. The management team has also been very good stewards of shareholders capital, and the market for smart phones, tablets and other mobile devices connecting to the internet remains very robust. 



From FPA Capital’s fourth quarter 2013 commentary.



 



Check out FPA Capital latest stock trades

Top Ranked Articles about InterDigital Inc

FPA Capital Comments on InterDigital
The most disappointing investment in the portfolio for 2013 was InterDigital (IDCC). This stock declined approximately 28% during the year, despite posting roughly 25% operating margins. Our thesis on IDCC is that the company should benefit from its wireless technology patents as more smartphones and mobile tablets are connected to the in ternet. IDCC creates wireless technology, applies for patents for the technology it creates, and then licenses its technology to manufacturers who produce the aforementioned products. In the past, Nokia, Samsung, Apple, LG, and many other manufacturers hav e licensed the company's technology to use in their products and paid IDCC royalties.

Typically, in the past, IDCC would receive royalty payments fixed for a certain period of time, for example four years, and then its customers would renew its license fo r another period of time and likely with some additional patents thrown into the agreement. However, as IDCC switched to receiving a royalty on a per unit sold basis and the Read more...
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According to the GuruFocus Value Screen that shows value strategies of stocks traded at historical low P/B ratios, InterDigital Inc. (IDCC), Quest Diagnostics Inc. (DGX) and PetroChina Co. Ltd. (PTR) are held by numerous gurus and are traded at or near their 10-year low. Furthermore, insiders are selling IDCC and DGX. Read more...
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Ratios

vs
industry
vs
history
P/E(ttm) 36.90
IDCC's P/E(ttm) is ranked higher than
53% of the 642 Companies
in the Global Telecom Services industry.

( Industry Median: 16.30 vs. IDCC: 36.90 )
IDCC' s 10-Year P/E(ttm) Range
Min: 5.15   Max: 2292.22
Current: 36.9

5.15
2292.22
P/B 2.50
IDCC's P/B is ranked higher than
66% of the 728 Companies
in the Global Telecom Services industry.

( Industry Median: 2.26 vs. IDCC: 2.50 )
IDCC' s 10-Year P/B Range
Min: 2.09   Max: 16.43
Current: 2.5

2.09
16.43
P/S 4.30
IDCC's P/S is ranked lower than
68% of the 822 Companies
in the Global Telecom Services industry.

( Industry Median: 1.46 vs. IDCC: 4.30 )
IDCC' s 10-Year P/S Range
Min: 2.23   Max: 15.17
Current: 4.3

2.23
15.17
PFCF 9.20
IDCC's PFCF is ranked higher than
86% of the 519 Companies
in the Global Telecom Services industry.

( Industry Median: 15.86 vs. IDCC: 9.20 )
IDCC' s 10-Year PFCF Range
Min: 3.05   Max: 122.33
Current: 9.2

3.05
122.33
EV-to-EBIT 10.60
IDCC's EV-to-EBIT is ranked higher than
82% of the 711 Companies
in the Global Telecom Services industry.

( Industry Median: 14.25 vs. IDCC: 10.60 )
IDCC' s 10-Year EV-to-EBIT Range
Min: 1.9   Max: 96.4
Current: 10.6

1.9
96.4
PEG 8.70
IDCC's PEG is ranked higher than
50% of the 406 Companies
in the Global Telecom Services industry.

( Industry Median: 2.58 vs. IDCC: 8.70 )
IDCC' s 10-Year PEG Range
Min: 0.01   Max: 8.7
Current: 8.7

0.01
8.7
Shiller P/E 12.80
IDCC's Shiller P/E is ranked higher than
80% of the 482 Companies
in the Global Telecom Services industry.

( Industry Median: 15.99 vs. IDCC: 12.80 )
IDCC' s 10-Year Shiller P/E Range
Min: 10.12   Max: 1981
Current: 12.8

10.12
1981

Dividend & Buy Back

vs
industry
vs
history
Dividend Yield 1.20
IDCC's Dividend Yield is ranked lower than
84% of the 570 Companies
in the Global Telecom Services industry.

( Industry Median: 3.70 vs. IDCC: 1.20 )
IDCC' s 10-Year Dividend Yield Range
Min: 0.4   Max: 1.49
Current: 1.2

0.4
1.49
Dividend Payout 0.43
IDCC's Dividend Payout is ranked higher than
76% of the 462 Companies
in the Global Telecom Services industry.

( Industry Median: 0.58 vs. IDCC: 0.43 )
IDCC' s 10-Year Dividend Payout Range
Min: 0.06   Max: 0.44
Current: 0.43

0.06
0.44
Yield on cost (5-Year) 1.20
IDCC's Yield on cost (5-Year) is ranked lower than
78% of the 584 Companies
in the Global Telecom Services industry.

( Industry Median: 3.83 vs. IDCC: 1.20 )
IDCC' s 10-Year Yield on cost (5-Year) Range
Min: 0.4   Max: 1.49
Current: 1.2

0.4
1.49
Share Buyback Rate 2.60
IDCC's Share Buyback Rate is ranked higher than
93% of the 565 Companies
in the Global Telecom Services industry.

( Industry Median: -0.20 vs. IDCC: 2.60 )
IDCC' s 10-Year Share Buyback Rate Range
Min: 7.4   Max: -8.3
Current: 2.6

Valuation & Return

vs
industry
vs
history
Price/Net Cash 12.10
IDCC's Price/Net Cash is ranked higher than
56% of the 82 Companies
in the Global Telecom Services industry.

( Industry Median: 14.10 vs. IDCC: 12.10 )
IDCC' s 10-Year Price/Net Cash Range
Min: 7.73   Max: 242.5
Current: 12.1

7.73
242.5
Price/Net Current Asset Value 7.50
IDCC's Price/Net Current Asset Value is ranked higher than
58% of the 157 Companies
in the Global Telecom Services industry.

( Industry Median: 8.90 vs. IDCC: 7.50 )
IDCC' s 10-Year Price/Net Current Asset Value Range
Min: 5.24   Max: 85
Current: 7.5

5.24
85
Price/Tangible Book 4.30
IDCC's Price/Tangible Book is ranked higher than
55% of the 506 Companies
in the Global Telecom Services industry.

( Industry Median: 3.30 vs. IDCC: 4.30 )
IDCC' s 10-Year Price/Tangible Book Range
Min: 3.38   Max: 37.88
Current: 4.3

3.38
37.88
Price/DCF (Projected) 0.80
IDCC's Price/DCF (Projected) is ranked higher than
80% of the 495 Companies
in the Global Telecom Services industry.

( Industry Median: 0.90 vs. IDCC: 0.80 )
IDCC' s 10-Year Price/DCF (Projected) Range
Min: 0.57   Max: 28.63
Current: 0.8

0.57
28.63
Price/Median PS Value 0.90
IDCC's Price/Median PS Value is ranked higher than
83% of the 736 Companies
in the Global Telecom Services industry.

( Industry Median: 1.00 vs. IDCC: 0.90 )
IDCC' s 10-Year Price/Median PS Value Range
Min: 0.46   Max: 10.7
Current: 0.9

0.46
10.7
Price/Peter Lynch Fair Value 1.60
IDCC's Price/Peter Lynch Fair Value is ranked higher than
55% of the 210 Companies
in the Global Telecom Services industry.

( Industry Median: 1.00 vs. IDCC: 1.60 )
IDCC' s 10-Year Price/Peter Lynch Fair Value Range
Min: 0.26   Max: 105.24
Current: 1.6

0.26
105.24
Price/Graham Number 2.70
IDCC's Price/Graham Number is ranked higher than
52% of the 429 Companies
in the Global Telecom Services industry.

( Industry Median: 1.80 vs. IDCC: 2.70 )
IDCC' s 10-Year Price/Graham Number Range
Min: 0.95   Max: 76.21
Current: 2.7

0.95
76.21
Earnings Yield (Greenblatt) 9.40
IDCC's Earnings Yield (Greenblatt) is ranked higher than
83% of the 716 Companies
in the Global Telecom Services industry.

( Industry Median: 7.00 vs. IDCC: 9.40 )
IDCC' s 10-Year Earnings Yield (Greenblatt) Range
Min: 1   Max: 52
Current: 9.4

1
52
Forward Rate of Return (Yacktman) 28.90
IDCC's Forward Rate of Return (Yacktman) is ranked higher than
95% of the 623 Companies
in the Global Telecom Services industry.

( Industry Median: 8.96 vs. IDCC: 28.90 )
IDCC' s 10-Year Forward Rate of Return (Yacktman) Range
Min: 0.7   Max: 857.3
Current: 28.9

0.7
857.3

Business Description

Industry: Communication Services » Telecom Services
Compare:CHU, VOD, T, VZ, AMOV » details
Traded in other countries:IDI.Germany
InterDigital, Inc., a Pennsylvania corporation was founded in 1972. The Company designs and develops technologies that enable and enhance wireless communications and monetizes such technologies used in digital cellular and wireless products and networks, including 2G, 3G, 4G and IEEE 802-related products and networks. The Company is a contributor of intellectual property to the wireless communications industry and as of December 31, 2012 held, through wholly owned subsidiaries, a portfolio of over 19,000 patents and patent applications related to the fundamental technologies that enable wireless communications. Products incorporating its patented inventions include: mobile devices, such as cellular phones, tablets, notebook computers and wireless personal digital assistants; wireless infrastructure equipment, such as base stations; and components, dongles and modules for wireless devices. The Company generates revenues mainly from patent licensing and sales, technology solutions licensing and sales and engineering services. It has developed solutions for the primary cellular air interface technologies in use today such as TDMA and CDMA and more recently, OFDMA and MIMO technologies. A number of the Company's TDMA-based and CDMA-based inventions are being used in all 2G, 2.5G and 3G wireless networks and mobile terminal devices. The Company's wireless background includes engineering and corporate development activities that focus on solutions that apply to other wireless market segments. These segments mainly fall within the continually expanding scope of the IEEE, IETF and ETSI standards. The Company is building a portfolio of technology related to the WLAN, WMAN and digital cellular area that includes, for example, improvements to the IEEE 802.11 PHY and MAC to increase peak data rates, handover among radio access technologies, mesh networks, radio resource measurements, wireless network management, wireless network security and broadband wireless. It offers non-exclusive, royalty-bearing patent licenses to companies that manufacture, import, use or sell, or intend to manufacture, import, use or sell, equipment that implements the inventions covered by its portfolio of patents. The Company competes in a wireless communications market characterized by rapid technological change, frequent product introductions, evolving industry standards and, in many products, price erosion.

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