Quarterhill Inc T.QTRH

A little rain on the "Roadmap" parade

[mrmoribund]

I love the Quarterhill story and I think the stock is likely moving higher. But people should remember that the sceptics are not without an argument.

Quarterhill has a history of being top-heavy in terms of fixed costs. Note that in 2020, even with the Viziya sale and the big Intel settlement, the company's return on equity was less than 7%. One might have thought that, including those 2 huge paydays we would have had ROE of 20% plus. Not even close.

Of course part of what held down the ROE was the huge cash holding--which was providing a return that would fit under a microscope. And the cash holding now looks to have been prudently deployed.

That said, in a way Quarterhill is currently looking as top-heavy as ever. For example, this little company currently has five CEOs. All great people I'm sure but it highlights the obvious detail that if this company is going to become reliably profitable it is going to have to get a LOT bigger. Most companies would be thrilled to have, say, 20% per annum sales growth. Quarterhill is going to have to do vastly better than that if it doesn't want to be struggling for years. My feeling would be that they really want to be at $500 million plus in sales within 3-4 years.

And I think ETC might really help them get there. But I understand how some people have a hard time totally buying into the story.

Additionally, one should bear in mind that while ITS is tech, it is also construction. That can mean big up-and-down cycles. The industry was riding high in 2016-17 and then, for many companies in the industry, including IRD, sales pretty much fell off a cliff. Something like that will happen again some day though, I admit, given the whole smart city movement, it might be many years away.

If / when the shares move above $3 I will NOT be using my newly-acquired margin space to buy even more shares, all driven by debt.

I'm sure my bank loves me but I would prefer not to give them an opportunity to skin me alive if some "surprise" were to drag the stock back down below $3. They are, after all, a bank.

[cabbieJBJ]

Thanks to v_g for his rocketman scenario and starting an important discussion.  But mrmoribund, looks like you won't fit under v_g's "bold and brave" tent.  That's okay...there is room for more tents in the campground.  Alternate viewpoints are welcome.  Thanks for participating.  

[wilander]

Thanks for the post mrmoribund. Nice to see a sensible approach and viewpoint rather than the gamble rah rah scenerio.

[cabbieJBJ]

Both are valid viewpoints Wilander.  Risk tolerance comes into play and is different for everyone.  Importantly, both v_g and mrmoribumd are bullish on QTRH.

[wilander]

Most everyone here is bullish.  Me included.  Some are just too over eager rah rah to be taken very seriously.

[cabbieJBJ]

Well that's fine Wilander.   But, there is no basis for criticizing v_g for his opinioin or his enthusiasm.  That's his reality.  It doesn't have to be yours or mine or mrmoribund's; each to his own.  Please appreciate the fact that v_g has been very helpful to the board  in posting court docs, investment opinions, etc.  For that we should all be

[wilander]

Grateful?  lol He purposely sent me a vile private message hoping I would lose money when he learned I sold a huge portion of QRTH at the $3 climb and went into another opportunity.   (I am back now with a large QRTH position and still holding the other.) He told me he was a short.  (I hate shorts.  Hate.)  That it was one of his main ways to trade. That he was

[cabbieJBJ]

His message was a private one to you.   You chose to break that trust and share it.  I'm sure v_g shorts and trades.  So what.  His infomation is good/reasonable and his opinions are out there to consider, accept or reject.  Why don't you take your issue with v_g outside and keep in it off the board.  Just sayin! 

[wilander]

youre the one singing his praises in response to my comment.  just giving you some truth snce you stepped into the convo. beware of the wolf in sheeps clothing.  even f they are pumping the stock you own.

[cabbieJBJ]

count me OUT of your convo.

[v_guerriero]

It's okay Cabbie. He is not angry with me, he is angry at himself. I publicly stated here that going all in on KNR at 3.40 was a dangerous bet.  There were several cross holders of QTRH here with KNR.  I strongly advised publicly against it.  The stock went from 3.40 to 0.80 in a matter of months. I was a 100% correct in my call that they were running out of money and

[cactuseskimo]

Ha! I wish I read your opinion before jumping into KNR. FWIW, most invested based on a product that the CEO pretty much promised was going to immediately fly off the shelf. It didn't happen like that, but I still like the investment and they have made major strides. It would have been nice to get in on that major dip you mentioned instead though!

[wilander]

You have no clue of how well I have done or what the company is about. Just like you have no clue that technical analysis on this stock is a complete and utter waste of time. But yeah, you have a few fan boys who will take anything positive whether its valuable or not. I get it.

[wilander]

As long as we all make money I'm happy. It's the fact you were hoping I didn't, that puts you in the select scummy crowd vg.

[cactuseskimo]

I like the new Wilander. He's returned as a more jaded, edgier, realistic investor. Much better than the chap who continually tried to to blow Quarterhill sunshine up everyone's butts, and attacked everyone who questioned his eternal optimism.  

[wilander]

You got that right cactus. I totally swallowed the Koolaid back then. Not any more. Held on long enough to make some good money here and back to make more. Doubt it's a long term hold though. Apple is the key and it is imminent. The rest is going to have to be soundly proven before I believe again.

[v_guerriero]

Yes, that is what happens when someone loses money.   They also prefer to camp vs cottage.  They snowshoe instead of ski.  They bicycle vs. Drive.   They also end up voting NDP.  

[willyk3]

You only got 3 out of 4 on that one.  Ive lost plenty of money in my time...but never would I vote NDP!!!!!!

[v_guerriero]

WiLander, you forgot to log out of your other alias.   willyk?  Seriously?  

[Frescaa1]

such an Ahole post. sigh......

[v_guerriero]

This is very valuable to me to see where the current opinion lies.  The reality is the "price" is setting the "narrative".   I am of the view that we have people looking at this and when it starts to move investors will chase due to FOMO.  I have also been very clear that when this stock gets above $3 you bring in incremental demand from margin trading as well

[Justhalffull]

Mr Moribund.  To add to your top heavy critique, here is a bit more of the overburden. Some of the Wi-Lan subsidiaries,  there are likely more.  Who knows the cost. Innovative Memory Systems Woden Technologies Security Video Camera Systems Xeushan Technologies Elpis Technologies North Star Innovations Securwav Storage Adaptive Streaming Polaris Innovations

[v_guerriero]

10 year average ROE is 15%.  Cormark highlighted it as one of the top 40 RoE producers on the TSX.  It is impacted by the large settlements that periodically come in.  You have to look at it through a longer cycle as patents are longer duration.  An Apple win or settlement would drive the 15% to over 20% and place it as one of the top 20 RoE compounded in Canada. Corporate

[mrmoribund]

v_g, I'm very much in your camp. If I were younger I probably would be up for buying more following a bump above $3. In my case, well, I'm already very heavily into Quarterhill. Also, I have resources elsewhere enough that I've been able to essentially satisfy my appetite for more shares at lower prices. So partly I'd be cooler at buying above $3 simply because it will be a higher