Friday, December 19, 2014 7:33:44 PM
By StreetAuthority, December 19, 2014, 11:00:00 AM EDT AAA
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The other day, I had an idea for a product. This happens to me fairly often, and the outcome is always the same: I look online and, lo and behold, someone else has already come up with it. So after I got tired of this idea rattling around my brainpan, I Googled it.
I found nothing. So I decided to allow the idea to marinate a little.
While I was driving to church the following Sunday, I had an inspiration. Not only did I have an idea for the product, I now thought I knew how to make it work. So after lunch, I stopped by a couple of stores and bought four ingredients. I went home and mixed them together in my garage.
The result worked exactly as I had thought it would.
I had a product. Something new. With a big market, I might add.
I built a spreadsheet to estimate costs. I went online and looked at potential packaging material and machines. I even started looking at used manufacturing equipment to mix the ingredients and fill the tubular plastic packages that I'd selected. I showed it to someone I trust who does business in the industry. He told me the idea was genius.
Build a better mousetrap -- they say -- and the world will beat a path to your door.
But then what?
The fact is, I don't know anything about manufacturing, marketing or distribution. I don't know how to get orders or how to get paid for them. I don't know how to get space on store shelves. All I had was an idea that turned into a gallon-sized Ziploc baggie of product, which I'm probably only going to use for myself. I just don't have the skills or the bandwidth to take the idea much farther.
Today, a new sort of company has found a way to extract revenue from intellectual property, like this new idea I had. In fact, I've had very good luck with a particular pick in this sector.
Let me explain...
These companies, known as "patent assertion entities," make their money either by independently acquiring and enforcing patents or by enforcing patents for businesses as a service.
And the market for this skill and service is rapidly expanding.
In 1970, about 100,000 patent applications were submitted. By 1994, that had risen to 200,000. In 2013, however, the U.S. Patent and Trademark Office received 609,052 applications (more than 2,300 per day) and granted about half, or 302,948. That was a 9.4% year-over-year increase.
These patents fall into three categories: Utility patents cover how things work, design patents deal with products, and plant patents, which are fairly new, cover genetic modifications to -- wait for it -- plants.
The key to finding the winning investments in this space is recognizing what sets the best patent assertion entities apart from the others.
I believe it's quite simple.
I'm all in favor of small-cap and even nano-cap companies -- they can be legitimate game-changing stocks. But the key in this sector is size. Larger companies have the resources to not only sufficiently monitor and monetize their intellectual property, but they also have the wherewithal to replace expiring patents. (They're only good for 20 years.)
For instance, one of my favorite investments is worth $1.9 billion, and it owns the company behind most of the whizbangery that makes your smartphone so smart. But it's been around since the 1970s, and that longevity combined with its size give it the resources to succeed in the patent game.
Just this year alone the stock has returned over 80%. It's no wonder that more than 70% of shares are held by the "smart-money" -- mutual funds, pensions, endowments, insurance companies and other institutional investors.
The patent stock I'm referring to is InterDigital, Inc. (Nasdaq: IDCC ).
All told, IDCC has 20,500 patents and pending applications. The balance sheet is strong. Cash and short-term investments total $732 million against total debt of just $215 million. The income statement shows steady organic growth. In 2010, it posted a 39% net profit margin.
As long as people are having new ideas, the number of patent applications in this country will continue to increase, which means the profit in this sector will do the same. It's just a matter of picking the ones with the best resources.
The rise in patents are just one of the trends I've been following recently. In fact, in a recent report I disclose my top game-changing innovations for 2015 -- including the same kinds of ideas that have delivered 92%... 293%... even 310% gains for investors in the past.
They include the private "millionaire's only" stock market that will be finally be opened to everyone... how Iran could unleash a new technology that will affect every American (and could turn a $2,500 investment into $11,515)... and Apple's new currency that will upend the banking industry as we know it. To learn more about these shocking predictions and others that could make early investors a killing, follow this link .
http://www.nasdaq.com/article/the-best-way-to-profit-from-innovation-cm425238
"The Investors's Chief Problem--and even his worst enemy--is likely to be himself"
---Benjamin Graham
Recent IDCC News
- InterDigital Announces Financial Results for First Quarter 2024 • GlobeNewswire Inc. • 05/02/2024 12:30:08 PM
- InterDigital awarded injunction against Lenovo • GlobeNewswire Inc. • 05/02/2024 12:30:00 PM
- InterDigital’s Doug Castor Elected Co-Chair of the ATIS Next G Alliance Steering Group • GlobeNewswire Inc. • 04/29/2024 08:00:00 AM
- New Report Pins 6G Success on Novel Benchmarks Extending Beyond Speed, Latency, and Mobility • GlobeNewswire Inc. • 04/25/2024 08:00:00 AM
- InterDigital Announces Date for First Quarter 2024 Financial Results • GlobeNewswire Inc. • 04/19/2024 12:30:00 PM
- InterDigital and Concordia University Announce Research Collaboration on AI-enabled Immersive Media Delivery over 5G Networks • GlobeNewswire Inc. • 04/15/2024 08:00:00 AM
- InterDigital Announces Convertibility of 3.50% Senior Convertible Notes Due 2027 • GlobeNewswire Inc. • 04/04/2024 12:30:00 PM
- InterDigital to Showcase Innovations in High Definition and Sustainable Video Streaming Alongside Partners at NAB 2024 • GlobeNewswire Inc. • 03/26/2024 08:00:00 AM
- InterDigital Declares Regular Quarterly Cash Dividend • GlobeNewswire Inc. • 03/20/2024 08:30:00 PM
- InterDigital’s Xiaofei Wang Appointed Chair of the IEEE 802.11 Artificial Intelligence and Machine Learning (AIML) Standing Committee • GlobeNewswire Inc. • 03/20/2024 08:00:00 AM
- Interdigital to Speak at the 36th Annual Roth Conference • GlobeNewswire Inc. • 03/11/2024 12:30:00 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 03/06/2024 09:58:21 PM
- Form 144 - Report of proposed sale of securities • Edgar (US Regulatory) • 03/05/2024 09:03:32 PM
- InterDigital’s Atle Monrad Elected Chair of 3GPP’s SA6 Working Group • GlobeNewswire Inc. • 03/05/2024 09:00:00 AM
- InterDigital Honors Wireless and Video Innovation Leaders Michael Starsinic and Fabrice Le Léannec as Inventors of the Year • GlobeNewswire Inc. • 02/22/2024 09:30:00 PM
- Keysight and InterDigital to Demonstrate AI in 6G Systems at Mobile World Congress 2024 • Business Wire • 02/21/2024 04:00:00 PM
- At MWC, InterDigital to Showcase Innovation Empowering Connected Experiences ‘At Work, At Rest, and At Play’ • GlobeNewswire Inc. • 02/19/2024 09:00:00 AM
- Form 10-K - Annual report [Section 13 and 15(d), not S-K Item 405] • Edgar (US Regulatory) • 02/15/2024 01:37:02 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 02/15/2024 01:33:18 PM
- InterDigital Reports Fourth Quarter and Full Year 2023 Financial Results • GlobeNewswire Inc. • 02/15/2024 01:30:36 PM
- U.S. Futures Edge Higher Ahead of Key Economic Data Release, Oil Prices See Modest Declines • IH Market News • 02/15/2024 11:35:32 AM
- InterDigital and Broadpeak Announce Collaboration on MPEG V3C Standardized Content Distribution At Scale • GlobeNewswire Inc. • 02/13/2024 09:00:00 AM
- InterDigital appoints Ken Kaskoun as Chief Growth Officer • GlobeNewswire Inc. • 02/12/2024 01:30:00 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 02/07/2024 01:43:10 PM
- Form 144 - Report of proposed sale of securities • Edgar (US Regulatory) • 02/05/2024 09:17:26 PM
NanoViricides Reports that the Phase I NV-387 Clinical Trial is Completed Successfully and Data Lock is Expected Soon • NNVC • May 2, 2024 10:07 AM
ILUS Files Form 10-K and Provides Shareholder Update • ILUS • May 2, 2024 8:52 AM
Avant Technologies Names New CEO Following Acquisition of Healthcare Technology and Data Integration Firm • AVAI • May 2, 2024 8:00 AM
Bantec Engaged in a Letter of Intent to Acquire a Small New Jersey Based Manufacturing Company • BANT • May 1, 2024 10:00 AM
Cannabix Technologies to Deliver Breath Logix Alcohol Screening Device to Australia • BLO • Apr 30, 2024 8:53 AM
Hydromer, Inc. Reports Preliminary Unaudited Financial Results for First Quarter 2024 • HYDI • Apr 29, 2024 9:10 AM