Ottawa patent player Wi-LAN (TSX:WIN) is “very cheap” and may be set for a big move, says one analyst.
Peter Imhof, Investment Strategist at Sprott Asset Management was on BNN’s Market Call with host Michael Hainsworth this morning, and fielded a call on Wi-LAN.
Imhof, noting that Wi-LAN has been one of his top picks a number of times, says he was a bit perplexed that the stock didn’t move more on the company’s recent deal with Samsung.
Late last month, Wi-LAN announced it had entered into a “broad long-term licence renewal to Wi-LAN’s patents for Samsung’s wireless mobile products and networking infrastructure equipment.” The deal is an extension of a 2009 agreement. Management said it gives Samsung a license to patents for wireless mobile products but extends the scope and term of the deal.
Imhof notes that while the terms weren’t disclosed, the Samsung contract was the largest the company has ever signed. “I am surprised the stock didn’t have a more of a run off of that news, ” he said.
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Imhof says the Wi-LAN is very cheap here in terms of their earnings growth, their dividend yield, and the cash the company has on its balance sheet. He thinks the stock could go to $7 within a year.
Imhof noted that many were of course hoping Wi-LAN would settle out before the current legal proceedings with HTC and Ericcson got underway, but he still believes it may be settled within the next couple of weeks.
“Even though they are going to trial they are probably still negotiating as this is going on,” says Imhof. “Even if they don’t settle I still believe Wi-LAN is going to win this,” he added.
Including the current actions against HTC and Ericsson, which are taking place in the U.S. District Court for the Eastern District of Texas, Wi-LAN has a total of six trials scheduled in the second half of 2013, including actions against Hon Hai, Alcatel-Lucent, and Apple.
At press time, shares of Wi-LAN were up 3.4% to $4.86.