(AP) Shares of InterDigital Inc., which licenses patents on wireless technology, climbed Friday after an analyst initiated coverage of the stock.
THE SPARK: Late Thursday, William Blair & Co. analyst Anil Doradla started InterDigital on an "Outperform" rating, saying patents are becoming more important in the technology world, and companies like InterDigital that specialize in licensing, selling or litigating patents can take advantage of that trend.
THE ANALYSIS: Some in the industry consider companies like InterDigital to be "patent trolls," and resent that they sue companies that make actual products.
Doradla notes that InterDigital and other "non-practicing entities" are "still not fully embraced," but are "gaining acceptance as sustainable business models."
Doradla cites deals over the past year that have put billion-dollar valuations on patent portfolios.
InterDigital shares plunged last year as it proved unable to latch onto the runup in patent values. But Doradla said he believes investors are being too pessimistic, and aren't taking into account the potential of new licensing deals from cellphone makers.
SHARE ACTION: InterDigital shares rose $1.43, or 4.4 percent, to $33.71 in afternoon trading. The shares hit a 52-week low of $22.37 in July and is down over 50 percent in the past year.