RE: New BUY recommendation - pt $6Here is Canaccord's analysis of WIN in their Daily Letter Summary.
WIN on NASDAQ. BOOOOOYAHHHHH Jim Cramer (Mad Money Show)! He would luv this stock!!!
Daily Letter Summary | 9
27 October 2010
TECHNOLOGY
Wi-LAN Inc. | Eyal Ofir, CFA, 1.416.869.7215
WIN : TSX : C$4.79 | C$492.4M | Speculative Buy , Target C$6.00
• Patent licensing and litigation provide near-term catalysts; initiating coveragewith a SPECULATIVE BUY rating and C$6.00 target price
Investment recommendation
Wi-LAN has been navigating through the litigation process against multinational
technology companies over patents related to multi-billion-dollar markets. With
trial dates set for January 4, 2011, namely the Laptop, Router, and Handset cases,
the potential for early settlements exists, and hence we believe the period leading
up to that date could prove to be exciting for shareholders. We have also obtained a
third-party opinion on the strength of the patents to provide us with added comfort
regarding Wi-LAN’s position if settlements are not reached. We are initiating
coverage of Wi-LAN with a SPECULATIVE BUY rating and a target price of C$6.00.
Investment highlights
• Wi-LAN is a technology development and patent licensing company thatcurrently holds more than 850 issued and pending patents in markets such as
Wi-Fi, CDMA, DSL, WiMAX, DOCSIS, and V-Chip.
• Wi-LAN’s wireless patents have been licensed to over 100 companies,including Nokia, RIM, and Samsung.
• Potential pre-trial settlements could represent windfalls in excess of C$400million, providing significant upside to the share price.
Valuation
Our C$6.00 target price is based on the average of our DCF and comps analyses
plus a conservative assumption for potential windfalls.
Risks
Patent litigation could bring significant share price volatility and there are no
guarantees of favourable outcomes.