Pendrell Corporation (PCOAD)

[RNsidersbuying]

PCO gets a SA nod:

Pendrell Corporation (PCO)

Probably my favorite net-net opportunity today, Pendrell Corp. presents a unique situation which offers low downside and considerable upside. Pendrell, formerly ICO Global Communications, is a company which engages in the business of licensing and selling intellectual property. The company generates revenue by licensing their inventions to other companies, or filing lawsuits against companies who, they believe, have infringed upon their patents. Although it trades at a price/NNWC of only about 85%, Pendrell saw positive cash flow last quarter due to the licensing of memory and storage patents to Toshiba Corporation (OTCPK:TOSYY). In addition to the IP business, Pendrell is sitting on a large sum of cash, about $170 million, which they hope to use for a strategic acquisition or partnership in order to provide them with more reliable cash flow and greater potential for growth. Pendrell's plan is to acquire a business through which they can monetize over $2.5 billion worth of net operating losses (NOLs). If Pendrell can manage to monetize this asset, we can expect the share price to appreciate considerably. Austin Newsom has written a couple of great articles summarizing the investment thesis.

http://seekingalpha.com/article/4007109-exploring-grahams-net-net-working-capital-strategy-part-3-first-6-months

PCO is my 3rd favorite 'net-net' behind #1 DNAI and #2 VSTM.