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Tessera Technologies Inc. Message Board

  • jimgray30 jimgray30 Jul 14, 2011 4:28 PM Flag

    Amazing valuation

    Lowest firm value in the last 10 years. $10 per share in cash. One of highest FCF rates in last 10 years.

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    • Case of great [unproven] prospects with bad timing. Assuming that the litigation on the Wireless ITC action is running down, there is a substantial award coming from that, but we don't know when or how much. With the key CSP patents now epired some licensees are resisting payment, and we can't tell yet how successful the [much easier to monitor] enhanced connection density IP will be. Doubling of standard memory chip capacity came during a slow period. And it's still probably 18 months to the decision of the second Amkor arbitration.

      Drifting stock price isn't a big surprise, and stock prices tend to drift down.

      • 1 Reply to jacosa
      • new to the stock but was doing some math. any thoughts?

        looks like the micro-elec business had $202m of EBIT in 2010, with optic -56m and corporate (!!!) -46m.

        on sum of the parts basis, seems like the valuation is super low.

        let's say micro-elec should be worth 4-5x EBIT (no backup here, but i will do the research).

        btw other IP companies like interdigial, ARM, Accacia, Digimarc (though i also need to do the research on how strong and important af TSRA patents vs listed above) trade at 7/10x+ on EV / Revenue basis!

        so at just valuing the micro-elec segment at 5x, you get to 1.1bn enterprise value vs. today's EV of around $400m? sounds kind of crazy.

        i'm either missing something (i.e., weak patents portfolio / investors worried about the losing money optics business and ton of money spent on corporate) or it's an amazing buy?

        also in a takeover situation, when the buyer would basically blow out most of corporate, looks like very attractive valuation.

    • Logi is the same way and great price.

 
TSRA
27.34-0.31(-1.12%)Sep 22 4:00 PMEDT

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