RE:Looking at the big picture.. This has been my thesis all along. QTRH is the best ASSYMETRIC stock on the TSX. This enables huge risk adjusted returns.
I can quantify Max 0.50 of downside, but $15-$20 of total upside. Even if I am wrong a lot about the upside, I can still make 300% instead of 1,000%. This is the ultimate in investing. The downside essentially is if the Board let's Paul run the company into the ground without any intervention. Whereas the upside is they continue to execute on the trajectory they are on. I am not aware of many situations like this other than the structured products sold on the US housing market in 08-09. Those had 20:1 or 100:1 setups.
And this is made possible because investors do not know how to value patent litigation. And, patent litigation enables asymmetric gains. Just look historically, the market mispriced the 2017 Samsung and 2020 Intel settlements. QTRH had to correct that by issuing quarterly pre-announcements.
If you believe Cabbie and I on the Motorola math, QTRH is valued at 9X 2022 ITS EBITDA + net cash ( including debt). ITS companies trade at 15X-17X. The WiLan business, all patents and the Apple case are all free. And you get a near 2% dividend. and you get a 40% cushion on the ITS segment. Wild.
Buying something like oil is just market or commodity risk. You are buying something that has symmetrical risk to crude oil prices. Some have different cost structures, some are smaller, some have more debt. But, they are all priced off the same commodity. You just choose where you want to sit on the symmetrical risk spectrum. But it all depends on oil. And oil is very volatile.
You are absolutely right that things can correct very quickly. It won't take much for analysts to have to raise price targets significantly. You can just look at their model assumptions. Even Todd discounts the Apple jury verdict by 85% to get to his $4.50 target. His assumptions are further clues for how quickly things can change around here.
I enjoyed your post. Thanks for the contribution.