Rambus: Hager Picks a Patent Play

01/03/2003 12:00 am EST

Focus:

Fred Hager

President, Fredhager.com

Investing in the outcome of a pending patent infringement suit is clearly a speculative endeavor, as an unexpected ruling could result in significant losses for those betting on the wrong side. For those willing to incur these risks, Fred Hager, editor of Fredhager.com , offers a “special situation” play as his top pick for 2003--Rambus.

"We believe there is tremendous opportunity, both long- and short-term, with Rambus (RMBS NASDAQ), the semiconductor design firm. The company is awaiting a ruling from the Federal court of appeals regarding a patent infringement case, and if the decision is overturned, in some or all of its respects, the company will be one step closer to earning royalties on the majority of the DRAM market.

"If the decision goes against Rambus, while the stock may be negatively impacted in the short-term, the company’s growing stable of intellectual property, combined with its penetration into new areas of chip-to-chip interfaces, should enable the company to grow revenues substantially long-term."

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