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Byron Capital’s Tom Astle raises target on Wi-LAN to $7.50

Wi-LAN today announced it had initiated two separate LTE-related patent infringement litigations in the U.S. District Court for the Southern District of Florida against Alcatel-Lucent USA and against Ericsson, among other parties.On Monday, Wi-LAN (TSX:WIN) reported it had acquired more than 150 patents from broadband solutions provider Alvarion Ltd. (NASDAQ:ALVR) for $19 million.

Wi-LAN CEO Jim Skippen said the acquisition was an important one because it strengthened the Ottawa-based patent player’s 4G patent portfolio.

Today, the company announced it had initiated two separate LTE-related patent infringement litigations in the U.S. District Court for the Southern District of Florida against Alcatel-Lucent USA and against Ericsson, among other parties.

Byron Capital analyst Tom Astle says adding 150 strong 4G patents to Wi-LAN’s already impressive collection of more than 500 makes it a force to be reckoned with. He says this war chest of patents puts the company in the top five of all 4G patent holders worldwide, a status Astle believes increases the company’s odd of successful litigation. The Byron Capital analyst says he has growing confidence that he previous fiscal estimates for Wi-LAN in 2013 were too conservative. He now believes Wi-LAN will earn $.55 cents a share on revenue of $117-million. In a research update to clients this morning, Astle maintained his BUY rating on Wi-LAN, but raised his target to $7.50, up a dollar from his previous target price.

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This article is brought to you by Zecotek (TSXV:ZMS). Zecotek holds over 50 patents and launched a major U.S. patent infringement lawsuit earlier this year. Click here to learn more.

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After the thrill ride that was 2009 through part of last year, the time since has been relatively quiet for shareholders of Wi-LAN. Since peaking at more than $9 last summer, shares of the company trickled off, tripping to under $5 this past May. But the company’s trajectory over a longer time frame has been decidedly up. Under the watch of CEO Jim Skippen, Wi-LAN’s revenue has climbed from just over $2 million in fiscal 2006 to the more than $100 million in fiscal 2011. The Ottawa-based company has quietly become one of the world’s top patent acquirers, on par or better than Apple, Google and Samsung in the third quarter of 2011. Wi-LAN was founded in 1992, commercializing a range of communications and consumer electronics products including routers, 3G handsets and WiMAX base stations. The Company now has more than three-thousand patents, and has already licensed their technologies to blue chip techs such as Cisco, Nokia, Panasonic, Samsung.

Astle says there are a couple risk factors investors should be aware of. First, he says, the next few quarters are unlikely to be strong as Wi-LAN will incur growing litigation expenses as trial dates near. He also points out that Wi-LAN peers Acacia and RPX have been quit weak of late, but says this appears to be mainly due to company-specific reasons.

Shares of Wi-LAN on the TSX closed today up 1.1% to $5.57.

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About The Author /

Nick Waddell
Cantech Letter founder and editor Nick Waddell has lived in five Canadian provinces and is proud of his country's often overlooked contributions to the world of science and technology. Waddell takes a regular shift on the Canadian media circuit, making appearances on CTV, CBC and BNN, and contributing to publications such as Canadian Business and Business Insider.

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