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RPX Corporation Message Board

  • investora2z investora2z May 9, 2013 11:33 AM Flag

    $13.50 can be an entry point

    The stock has corrected from the recent high of $15.69. JP Morgan has a target of $16 on the stock, and had downgraded it from overweight to neutral. However, considering the good performance of the company over the years and its decent valuations, the corrections are likely to be bought. Even if this decline runs deeper, $13.50 could be a good level to enter. On a 52 week basis the stock has not done much, but it is up around 70% from its lows of $8.55 in December last year. Despite the rise, the valuations are still reasonable as the P/E is less than 17. in Q1'13, the revenues and net income grew by 40% and 80% respectively. The growth story may continue in the robust IP monetization / licensing market. However, competition is also increasing and new players are entering the consultancy / patent defense space. Recently Spherix IP (SPEX), which has several patent applications pending for its drug research, changed its business model to become a full service IP company. RPXC has done well so far and if the management remains proactive and alive to new opportunities, then it may be able to continue the growth story. New segments and marketing strategies may help the company maintain the growth trend. With no debt on books and a decent amount of cash ($283 million as on March 31, 2013), the company may be comfortably place even for patent acquisitions. The volumes during the recent rise indicate that the decline may end sooner rather than later and the stock may attempt to take out the 52 week high of $17. The possibilities are high because the rise has been based on fundamental and technical strength. Another quarter of good earnings growth will definitely set the stock on course for much higher levels. It is interesting to remember that the all time high of the stock is $31, which is still very far away.

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