IDT: Spin-off, Apps, and Cuba

02/01/2016 7:00 am EST


Nick Hodge

Founder and President, Outsider Club

We originally bought this recommended stock as a play on the opening up of Cuba. And it still is, explains Nick Hodge, editor of Like Minded People.

IDT Corp. (IDT) is the only telecom approved to provide landline service to America from Cuba. But its other businesses are exciting as well, as is its history of successfully incubating and spinning-off tech companies.

The company announced last August that in 2016 it would spin-off its operations into three separate businesses. Those will break down like this:

1) IDT Telecom is a global provider of retail and wholesale telecommunications and payment services.

IDT Telecom’s retail offerings include prepaid voice and payment services primarily to immigrant communities under the Boss Revolution brand. Its wholesale carrier business is a leading, global carrier of international long distance voice traffic.

2) Zedge provides one of the most popular content platforms for mobile device personalization including ringtones, wallpapers, home screen icons, and game recommendations.

Its smartphone app, available in both Google Play and iTunes, has been installed over 160 million times and has averaged among the top twenty most popular apps in the Google Play store in the US for the past five years. IDT owns approximately 83% of Zedge.

3) IDT’s other holdings comprise a Gibraltar-based bank, real estate holdings including its headquarters building and garage in Newark, NJ, and an operations building in Piscataway, NJ.

The company also holds interests in other—mainly early stage—business initiatives. This entity will retain cash resources for investment in technology and other ventures.

IDT paid its last quarterly dividend—$0.19 per share—on December 18. At current prices it is yielding 6.5%. This is one of those rare cases where you can get both income and growth. We continue to rate IDT a buy.

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