investora2z Sunday, 09/01/13 06:14:45 AM Re: None Post # of 35 The stock has corrected significantly after the earnings. Exposure to earnings is always risky, and has a 50-50 chance of success. It is more speculative than anything else. For RPXC, the revenue increased slightly from $55.2 million in Q2'12 to $57.5 million in Q2'13. Net income declined from $13.2 million (25 cents per share) to $10.7 million (20 cents per share) – a 20% drop. For the full fiscal 2013, RPXC management expects total revenue in the range of $229 - $235 million, and net income (non-GAAP) - $50 - $53 million, which is actually an improvement from the earlier guidance. Zacks recently downgraded the stock and has a PT of $20.30, while analysts at Barclays Capital had raised their price target from $17.00 to $18.00 in early July. Despite the correction, the stock has done well over the last few quarters. It is up 35% on a 52 week basis, and 61% in 2013. Correction has improved the valuations slightly, and now the stock is trading at a P/E (ttm) of nearly 19 (forward P/E 14.8). There was another article on seekingalpha recommending to buy RPXC. The unique business model of RPXC and its expanding economic moat are the main reasons for the author's positive opinion on the stock. RPXC helps the companies avoid costs by mitigating patent litigation. This is important because litigation is time consuming and costly. Patents monetization is big business now, and even smaller companies like Marathon Patent Group (MARA) have been able to enforce settlements against bigger companies. The author considers RPXC as undervalued as the entire company can be bought for less than the cost of its patent portfolio. The article also mentions some risk factors, and hence needs to be read in totality.