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AOL Inc. Message Board

  • investora2z investora2z Apr 12, 2013 11:17 AM Flag

    UBS initiates coverage

    UBS recently initiated coverage of AOL with a buy rating. The stock is increasingly finding favor with analysts in view of its performance, especially in the last quarter. The volatility of the stock has been tremendous as it has moved from around $24 to $ 44 between May and November, and then fallen to $30 before bouncing to current levels of $39. The stock is currently trading above the 50 DMA ($37) and 200 DMA of ($35). The long term picture is even better with the stock presently three times the $12 levels at which it was trading in August 2011. Despite the rise, the stock is still trading at 1.4 times book value and 1.38 times sales. The recent move has been based on better than expected results. It recorded quarterly growth for the first time in 8 years. In 2012, it had an abnormal income of $1.1 billion due to sale of licenses. Such transactions are on the rise with companies going all out to monetize patents and enforce infringements. Several companies are going for acquisitions / mergers to get access to IPR portfolios or knowhow. e.g. Document Security System (DSS) recently purchased Lexington Technology Group (LTG) to get access to their patent portfolio. LTG recently filed a suit against Facebook (FB), LinkedIn (LNKD) etc. which is potentially worth billions. DSS will benefit immensely if it the decision goes in its favor. AOL itself has faced suits from other companies, and is aware of the value of its patents, and needs to remain conscious of unintended violations. On the fundamental front, AOL is continuously trying to improve business performance by building partnerships with other players. Recently it entered into an agreement with multimedia publisher Publishing Group of America whereby both parties will benefit from the customer base of the other. The fundamentals have to continuously improve so that the stock maintains the uptrend.

44.04+0.20(+0.46%)Jan 29 4:04 PMEST

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