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The last earnings had given a strong boost

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investora2z   Thursday, 06/13/13 07:21:18 AM
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The last earnings had given a strong boost to the stock and it jumped from $13 to nearly $16 pretty quickly. After that it has remained in a narrow range between ~$14.5 and ~$15.5. The volumes have been good, but there is no fundamental push to take it above the recent highs. The current P/E is around 17.5 and the forward P/E for year ending December 2014 is ~14 which indicates expectations of moderate growth. The price to sales (3.77) and price to book (2.13) are also not too high. The net profit margin (ttm) is above 21%. The fundamental growth has been excellent over the years and the last quarter was no exception. Revenues increased by ~40% and net income increased by ~82% on a yoy basis. Even sequentially, the company reported good growth in revenues and net income. With zero debt on books and more than $280 million cash, the fundamentals look attractive. JP Morgan had earlier given a target of $16 for the stock which appeared easy. However, it has not been able to cross that. The market for patent monetizing / licensing has increased over the years and RPXC can definitely continue its growth story. Even smaller companies like PLC Systems (PLCSF) are attempting to optimize the value of the patents they possess. PLC Systems recently obtained US & European patents related to its only product RenalGuard. So far, RPXC has not disappointed investors and good performance has continued during the last few quarters. It is up by more than 80% from the multi-year low of $8.55 made in November 2012. The next major push will come from the earnings, but some other positive news flow can also help the stock cross the hurdles. However, since the stock has repeatedly hit the recent highs and retraced, it is good to remain a little cautious.

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