The stock seems to be waiting for some push to take it out of the range. It has recovered a substantial portion of the fall from $29 to $21, but has not gained decisive strength to take it above crucial levels. The most likely push will be the earnings, but that is a little far away. Some news related to acquisition of patents or licensing arrangements may do the trick. But till that, it may remain subdued. The fall in April was backed by huge volumes, and the stock has managed to do well to recover from the lows. Its main strength lies in the patent assets it owns which provide it with licensing / other revenues. The earnings, have been a little unstable over the past few quarters, and that is the reason why the stock has remained relatively volatile. Growth in patent monetizing / licensing business has increased the focus of small and big companies on the IPR assets they own. Companies are trying to optimize the values of the technologies they possess by taking professional advise. Smaller companies like PLC Systems (PLCSF), a medical device company, work to build a patent portfolio around a single product (RenalGuard) which they possess. Other companies attempt to diversify their portfolio and get patents which provide them with licensing revenues. For Acacia, the valuations are relatively high as compared with the peers. The P/E is 82 and P/S is more than 5. The profit margin is low at around 6%, and the sentiments have been adversely affected after the last earnings. The street downgraded the stock to hold recently, but was confident about the liquidity position. The prospects for the company are good, and if it can provide a positive surprise in the next earnings, then the sentiment may change significantly.
