A recent article on seekingalpha is remarkably positive on Acacia. The author contends that Acacia is a long misunderstood company with low valuations compared to its peer group stocks, high level of underused intellectual property, high capital, little direct competition and strong balance sheet, with at least 25% of market capital in its balance sheet. The article is interesting and gives good information about the industry and the company. The potential of the company is evident from the performance over the last few years. It has grown at an exponential pace, though the last couple of quarters have been particularly bad. The stock performance has also not been very good as it has remained volatile, and declined over the past couple of years. The opportunity is immense as more and more companies are realizing the potential of monetizing their IPR assets, but they do not have the capability to do so themselves. Acacia offers the required services for these companies to achieve their objective. Patent monetizing business has grown tremendously over the last few years with even smaller companies like Marathon Patents Group (MARA) taking on bigger companies like Cisco, Dell etc. However, the potential of Acacia has to be reflected in the earnings of the next few quarters otherwise the sentiments may deteriorate. So far, the stock has shown some resilience by taking support around $20-21. Those levels need to be kept in mind. The correction in the stock has made the dividend yield much better. However, even dividends ultimately depend on financial performance, and payouts from reserves cannot be sustained. The performance in the next quarter will be crucial, and the good part is that the expectations will be much lower at that time. Some may like to see its performance in Q3'13 before considering a dip for the long term.
