Monday, December 5, 2016

WiLan Inc.

Sound bite for Twitter and StockTwits is: Cheap with problems. Even though they have had revenue and cash flow, EPS has not been there. Comprehensive Income is just as bad. They have just cut their dividends by some 76% because they have not been able to afford dividends compared to earnings for some time. It is also a patent troll. See my spreadsheet on WiLan Inc.

I do not own this stock of WiLan Inc. (TSX-WIN, OTC-WILN), but I used to. I bought this stock in 2000 and sold in 2006. I lost 99.4% of my investment. Good job I did not invest much in this stock, but I still lost over $12,000. I sold at a low of $0.60 a share plus paid $50.00 in commission. I do not know why I paid so much in commission as generally my commission was around $26 a trade at that time. The stock is currently around $1.82 per share.

The reason I bought this company in 2000 was because 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. That is they became patent trolls.

The just decreased their dividend by some 76%. They have had a number of earnings losses years and could not really afford their dividend. Over the past 5 year they paid out over 400% of what they made. If you look at dividend growth over the past 5 years, it is down by 10.6% per year. They are still expected to payout more this year than they earn but analysts expect better in 2017. However earnings for the first three quarters are lower than last year!

They have increased the outstanding share by 2% and 11.1% per year over the past 5 and 10 years. This means, especially for the longer term, we should be looking at per share values. The company is currently reporting in US$. The Revenue has grown by 15.1% and 17.0% per year over the past 5 and 10 years in US$. The Revenue per Share has grown at 12.9% and 5.3% US$ per year over the past 5 and 10 years.

Because of the years of earning losses, I cannot calculate growth per year for EPS. However, I can say that total EPS has grown at 138% and 115% over the past 5 and 10 years. Cash Flow per Share is growing. It has grown at the rate of 109% US$ per year over the past 5 years. Over the past 10 years CFPS has grown in total by 253%. There are negative cash flow years so I cannot calculate per year growth.

The 5 year low, median and high median Price/Earnings per Share Ratios are 11.74, 23.74 and 35.75. I cannot calculate P/E Ratios for the past 10 years or historically as there are too many year of earning losses. The current P/E Ratio is 3.42 based on a stock price of $1.82 CDN$ and 2016 EPS estimate of $0.53 CDN$ ($0.40 US$). The 5 year P/E Ratios are rather spread out, but a P/E Ratio of 3.42 is low. This stock price testing suggests that the stock is relatively cheap.

I get a Graham Price of $5.81 CDN$. The 10 year low, median and high median Price/Graham Price Ratios are 0.62, 1.12 and 1.56. The current P/GP Ratio is 0.31 based on a stock price of $1.82 CDN$. This stock price testing suggests that the stock is relatively cheap.

I get a 10 year Price/Book Value per Share Ratio of 1.88 CDN$. The current P/B Ratio is 0.64 based on a stock price of $1.82 CDN$ and BVPS of $2.82 CDN$. The current ratio is some 66% lower than the 10 year ratio. This stock price testing suggests that the stock is relatively cheap.

I cannot do any dividend yield testing as the dividend has been cut. The P/S Ratio is 7.37 CDN$. The current P/S Ratio is 1.99 CDN$ based on Revenues of $108.11 CDN$ ($81.30 US$), Revenue per Share of $0.91 CDN$ and a stock price of $1.82 CDN$. The current P/S Ratio is some 73% lower than the 10 year median ratio. This stock price testing suggests that the stock is relatively cheap.

When I look at analysts' recommendations I find 3 analysts following this stock with 2 Strong Buy and 1 Buy recommendation. The consensus recommendations would be a Strong Buy. The 12 months stock price consensus is $3.18. This implies a total return of 77.47% with 74.73% from capital gains and 2.75% from dividends based on a current price of $1.82.

There is some technical analysis on this stock at Wall Street Confidential. Williams Percent Range shows stock is close to being overbought. In other words stock price is high. This article in CSZ News talk about analysts being positive about this stock. Note price is quoted in US$ not CDN$. See what analysts are saying about this stock on Stock Chase . This article on Street Insider talks about one of this company's license Agreement.

I will have only one entry for this stock this year. However, I did a more complete report on this company in 2015 and you can see that report here.

The last stock I wrote about was about was Finning International Inc. (TSX-FTT, OTC-FINGF)... learn more . The next stock I will write about will be Chesswood Group Ltd. (TSX-CHW, OTC-CHWWF)... learn more on Wednesday, December 7, 2016 around 5 pm. Tomorrow on my other blog I will write about Dividend Stocks December 2016... learn more on Tuesday, December 6, 2016 around 5 pm.

Wi-LAN Inc. is an intellectual property licensing company. The Company develops, acquires, licenses and enforces a range of patented technologies which are utilized in products in the communications and consumer electronics markets. Its web site is here WiLan Inc.

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. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits.

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