Quarterhill Inc (QTRH.TO)

When they changed, he thought they might be able to get rid of the WiLan issues. They couldn’t put a consistent quarter together if their life depended on it. The quarter before, blew out estimates because they had some really big settlements with patent litigations. However, the recent quarter was not great, missing estimates and not doing what people expected. A pretty cheap company. Diversifying into an Internet of Things company, and he kind of likes the space they are trying to get into. It’s very hard to get excited about this company.

Still a patent troll. That’s all they did until towards the end of last year. Took over 2 companies, both in the Internet of Things, so their cash hoard went down from over $100 million, to about $45 million. It eventually went under his "Buy-in" price, but since then they’ve been going like gangbusters. Last year, for the full year, revenues were $93 million. Last quarter, revenues were $19 million. Announced revenues for this quarter are going to be $73-$83 million. Dividend yield of 2.1%. (Analysts' price target is $3.)

They are in the patent business. It tends to be lumpy. They have a good quarter in defending patents and then another where the stock pulls back. It frustrates him from a trading perceptive.

Made a major change after he bought into it. They’ve moved from being a “patent troll” and into the Internet of Things. They’ve done takeovers and has over $100 million in cash. What they are doing may work out. It is very early in the game. Dividend yield of 3.1%. (Analysts’ price target is $2.50.)

Used to be WIN-T. They are looking at being a holding company for the Internet of Things. Their recent quarterly earnings were good – they made money. They have a good balance sheet and pay a dividend. (Analysts’ target: $2.50).

It is the old WiLan. He thinks they dramatically overpaid when they bought into two companies. This is going to use up a lot of their cash. It is on his buy list, but he is skeptical.

This still has its patent litigation, but has now deployed some capital into buying a couple of other companies. It is going to become a holding company. Recently bought International Road Dynamics and one other company. Thinks they are trying to transform the company, so there will probably be a turnover in terms of shareholders. There will probably be a discount to the sum of its parts.

He doesn’t really like what they do because he doesn’t like litigation. WIN-T is involved in about 60 law suits. But they have had a lot of success. They have zero debt and a lot of cash. He thinks they can double from this point on. (Analysts’ target: $4.41).

It is a choppy chart. It looks like it has been attempting to break out.

Just put up a massive quarter that beat everybody’s expectation, and the stock moved up quite a bit. When you look at it on any metric, it looks super cheap. Trading at $2.35 and they have $1 a share in cash. Will probably do $40-$50 million in cash flow this year, but will probably be lumpy. Beat expectations by quite a bit this quarter, but three quarters ago they missed expectations. It depends on when deals get signed. He feels comfortable with this. Has a great balance sheet. He wouldn’t hesitate to buy this here, especially on a quarter where they miss.

A name he wishes he had never come across. Made a lot of money with one of their rivals, Mosaid. You never know what percentage of lawsuits they are going to win. He had put money into this, but it turned out to be an absolute disaster. There is not the transparency and have not delivered in the courtrooms.

He has not been involved for a while except for buying a lot at the beginning of the year and he sold half at the high. They just missed on the last quarter. He thinks they can sign more companies. The overall market is coming back to some of these names. This is a good entry point.

Known as a patent troll, and will sue people with their patent portfolio, their primary source of revenue. It is a really cheap stock at 3.5X Price to Free Cash Flow, and 1.8X EB to EBITDA, .8 to BV. It is hard to find companies that have metrics this cheap. He wants this to find a bottom and some support before he goes Long.

He dropped coverage on this company, because of the mass of inconsistencies they had in terms of their earnings report. They would come out with a quarter and spend $10 million on litigation fees, and their revenues would drop and earnings would not be what he expected. It went on a big run, until they missed their quarter very, very badly. He would rather have a company that is not inconsistent.

(Market Call Minute.)