InterDigital (Nasdaq:IDCC) Has Strong Patent Moat

InterDigital (Nasdaq:IDCC) has enjoyed a couple of days of big gains, as the financial media has pointed out some of the strengths enjoyed by the company, including their strong portfolio of patents, which results in about 80 percent of the giant mobile service providers carrying wireless products from the company.

The company continues to build up their patent portfolio, which will over time generate predictable and sustainable cash flow for them.

After a report from Barron's and additional coverage afterwards, InterDigital has skyrocketed over the last two trading sessions, having the potential to climb significantly more going forward.

The company is considered cheap, trading at about 15x FY10 EPS estimates. Over the last 12 year, InterDigital generated almost $148 million in free cash flow as well. The latter metric has been volatile, but is expected to continue to move up in 2011.

Measuring how they measure up against competitors, Alcatel-Lucent (NYSE:ALU) is expected to trade at 18.2x full year 2011 estimates and QUALCOMM (Nasdaq:QCOM) 18.1x.

InterDigital closed Monday at $53.51, gaining $2.70, or 5.31 percent.