RPXC which provides patent risk management solutions, offering defensive buying, acquisition syndication, patent intelligence and advisory services, is on an uptrend since last few months. It provides a subscription-based patent risk management solution that facilitates exchanges of value between owners and users of patents. It is up nearly 74% from the 52 week low made in November 2012. The trading volumes have been upbeat with the 10 day average being only slightly lower than the three month average of 266K. This increase is backed by decent earnings. The company recorded a revenue of $197 million for 2012 compared with a revenue of $154 million in 2011 (an increase of ~28%). The net income also increased from ~29 million in 2011 to ~39 million in 2012 (an increase of 31%). The net profit margin is around 19.7%, and the forward P/E is 14. The quarterly revenue growth is also good with ~22% and ~46% growth in revenue and net income respectively. The company has zero debt on books, and has $199 million cash & cash equivalents. Institutions hold around 55% of the stock, and insiders are holding nearly 36%. The good margins and healthy balance sheet indicates inherent strength in the fundamentals. Patent monetization has itself become a business model now, and it is expected that the company will continue to leverage the enhanced interest of other companies in this field. Several lawsuits have been filed for infringement of patent rights by companies, latest being Marathon Patent Group (MARA) against Sony, Dell etc. Lawsuit filed by MGT Captial Investments (MGT) against gaming companies also made news recently. These lawsuits can be game changers for these companies. Companies which are in drug development e.g. Spherix Inc. (SPEX), or even companies in other research and development fields are beginning to realize the potential value of the knowledge the possess. All such companies will definitely require services of patent risk management / consultant services, and professionals like RPXC may be able to encash on the increasing market.
