Quarterhill Inc (QTRH.TO)

Starting to come to fruition. Largest contract Wi-Lan has ever signed. Thinks they will settle out of court. 95% do. Thinks they will win. 46% upside from here. Samsung deal is the largest they have ever signed. Will move up when you see quarterly earnings.

(Top Pick May 16/13, Up 5.68%) Run by one of the best patent lawyers in North America. In a growing segment. Good prospects going forward.

Doesn’t like this one. All of these types of companies tend to have lumpy ROE’s through the cycle. Returns are not high enough for him.

This is his single most frustrating stock because he gave it an A rating when he first started. Then they missed a couple of quarters and everybody hated the stock. Then he downgraded to A minus. It was cheap, had potential, had the cash and had a great dividend. Now, a year later, they are starting to hit contract after contract. Believes that every licensing deal they sign makes them stronger.

Patent litigation is not something he knows a lot about. You have to do a lot of homework with this company. There are constant changes happening in the legal system that you have to be aware of.

Reached a licensing deal with Dell for some of their patents after suing them. He is watching it. This is the type of news that could start a trend of new settlements that would interest him.

This is a company that makes a living through litigation. Fundamentally he does not care for this kind of business. Technically, it is not showing up well. There are better places to be.

A patent technology company. Had a tough year last year, with litigation expensive, which will be seeing the fruits of their labor this year. They sue to make money. Most of the time, things are settled out of courts, they have a few jury trials coming up.

(Market Call Minute.) Stock has been beaten up. One of the best run companies in licensing technology.

(Market Call Minute.) A stock that everybody loves to hate but it’s cheap at 10 or 11 times earnings. $170 million in cash and it pays a dividend and the dividend is growing. One day it will sign a big deal and people will get excited, but not right now.

A “show me” year as they are in a lot of trials. This will be the time where they are going to sign more licensing deals or they will be in trouble. Stock has been weak over the last couple of months. Recently came out and said one of the trial dates has been pushed back but this is just a timing issue. Feels they are very strong in the patents they do have against the companies they are going up against. Have a ton of cash on their balance sheet. Yield of 3.96%.

Has looked at this one quite closely and has chosen not to participate. The long-term track record in terms of ROC is very lumpy with a good year, bad year. You want to make sure that your good years are strong enough to offset the bad years. Looking at the cycle on ROC, it doesn’t make the cut.

Most frustrating stock. 3 Quarters in a row of missed earnings. Upside potential is there, dividend has been growing and some day they will sign a big deal with their royalties and patents. Great balance sheet. Not a whole lot of risk.

Very large number of patents in some very interesting spaces. Stock has pulled back, partially because near-term earnings are depressed, which is usually a good thing. Spending a ton of money on legal expenses. Outlook should be pretty good for 2013. Expected to earn $.43 which would be an increase of 23% year-over-year compared to 2012. Could see it hitting $7-$8. Ranks well in his models. He is waiting for improvement in technicals.

Exited his position at around $5 last year. Looks like some of the momentum in terms of winning rulings has moved against them, which lowers their leverage in negotiations. This is a “wait and see” story.