Monday, November 3, 2014

WiLan Inc.

On my other blog I am today writing about the presentation at the World Money Show in Toronto by Patrick Ceresna.

I do not own this stock of WiLan Inc. (TSX-WIN, NASDAQ-WILN), but I used to. I bought this company in 2000, as it was an up and coming company in communications. I sold it in 2006 after losing most of my investment. This stock has never recovered from the bubble that occurred in 2000. I lost all hope of ever making any money on this stock. The other thing is that they completely refocused their company, or completely changed it to earn money on their patents.

I do not look at this company as a real company any longer. They are a patent troll and they cannot seem to make any money from it. They pay a dividend but they cannot afford to. Yes their dividend has grown a lot, up some 57.8% over the past 4 years since they started to pay dividends. I do not consider this a dividend growth company as they cannot afford to pay dividends now or over the next few years at least.

Outstanding shares have increased by 12.1% and 3.9% per year over the past 5 and 10 years. Revenue has gone up but not revenue per share over past 10 years. EPS has gone nowhere because there has been earnings losses in the past 2 years. However, there were positive earnings in the third quarterly report for 2014. Cash flow has gone nowhere.

Revenue is up by 29.7% and 13.3% per year over the past 5 and 10 years. However, Revenue per Share is up by 24.8% and just 1.1% per year over the past 5 and 10 years. Cash flow is down by 1% per year over the past 5 years and CFPS is down by 4.3% per year over the same period. There are no 10 years values as cash flow was not positive until 2007.

With negative EPS there is no Return on Equity. Debt ratios are good with Liquidity Ratio at 3.25, Debt Ratio at 4.01 and Leverage and Debt/Equity Ratios at 1.33 and 0.33. There is a lot of cash on hand with cash currently equaling some 31% of the stock price.

With lots of negative earnings years, I can get no fix on relative Price/EPS Ratios. However, a current one of 33.08 based on a stock price of $3.73 and 2014 EPS estimate of $0.11 seems to be rather high. As far as I can calculate, the Graham Price seems to be $2.44. The Price/Graham Price Ratio is 1.53. This shows that the stock is no bargain. Also, the 8 year low, median and high median P/GP Ratios are 0.61, 1.12 and 1.50. All lower than the current P/GP Ratio.

The only positive test is the one for Price/Book Value per Share. The 10 year median is 1.78 and the current one at 1.59 is some 11% lower based on BVPS of $2.35 and a stock price of $3.73.This shows a relatively reasonable stock price. Also as mentioned above there is a lot of cash on hand.

When I look at analysts' recommendations, I find Strong Buy, Hold and Underperform recommendations. There are no Buy recommendations and most are Hold recommendations. The consensus recommendation is a Hold. The 12 month stock price consensus is $4.49. This implies a total return of 25.74% with 5.36% from dividends and 20.38% from capital gains.

Sound bit for Twitter and StockTwits is: Cannot afford to pay dividends. I would not buy as they do not seem to be able to make any money and they are a patent troll. See my spreadsheet at win.htm.

I will have only one entry for this stock as I must do on some stock because I cover too many stocks to do double entries on all that I follow.

Wi-Lan was founded in 1992 to commercialize technology inventions that made low-cost, high-speed wireless networking a reality. Proven through several generations of products manufactured by Wi-Lan and applied in multiple technology standards, Wi-Lan's inventions were, by 2005, commercialized in millions of wireless networking devices worth many billions of dollars. Realizing the value that its intellectual property brought to industry, Wi-Lan chose in 2006 to focus its business on the development, protection and monetization of patented inventions. Started as a public company inn 1998 Its web site is here WiLan.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.


  1. I found your blog through another dividend growth oriented blog.

    I kind of fell in love with your spreadsheet. Care to share the template spreadsheet in excel?

    Thanks and I added you blog to my RSS reader :)

  2. Thanks for introducing WiLan to me. Never heard of this company before which is part of the reason I love to read other financial blogs. Every now and then you are introduced to something you have never heard of.