Small cap patent stocks Spherix Inc (NASDAQ: SPEX), PDL BioPharma Inc (NASDAQ: PDLI) and Endeavor IP Inc (OTCBB: ENIP) are among the growing number of publicly traded US entities focused on collecting and making money from various types of patents. After all, monetizing patents can lead to incredible returns. For example: Nomura analyst Rick Sherlund wrote in a research note back in November that Microsoft Corporation (NASDAQ: MSFT) is generating $2 billion per year in revenue from Android patent royalties and he estimates that this revenue has a 95% margin. However, there are risks associated with investing in stocks that invest in patents because a bi-partisan bill called the Innovation Act (H.R. 3309) is working its way through Congress to try and reign in the activities of so-called "patent trolls" or rather companies that buy or license patents from others.
With that risk in mind, here is a quick look at a couple of small cap patent stocks focused on making money from patents:
Spherix Inc. Committed to advancing innovation by active participation in all areas of the patent market, Spherix draws on portfolios of pioneering technology patents to partner with and support product innovation. More specifically, Spherix continues to work on life sciences and drug development and is presently exploring opportunities in sports and nutritional supplement products relying on its D-tagatose natural sweetener as a GRAS ingredient plus the recent acquisition of several hundred patents issued to Harris Corporation will allow the company to expand its activities in wireless communications and telecommunication sectors (including antenna technology, Wi-Fi, base station functionality and cellular). Last Monday, Spherix Inc announced that it had entered into a series of agreements with Rockstar Consortium (US) LP to acquire over 100 patents and patent applications with the newly acquired patents covering among other things, numerous aspects of access, switching, routing, optical and voice communication network devices. It should be mentioned that the Rockstar Consortium was a group created by Apple, Microsoft Corp and other technology companies that spent $4.5 billion on a portfolio of 4,000 patents and applications from Nortel Networks Corp. On Thursday, small cap Spherix fell 1.16% to $8.50 (SPEX has a 52 week trading range of $4.07 to $27.86 a share) for a market cap of $20.46 million plus the stock is up 24.3% over the past year and down 11.8% over the past five years.
PDL BioPharma Inc. Formerly known as Protein Design Labs, Inc, PDL BioPharma is involved in the management of antibody humanization patents and royalty assets, which consist of its Queen et al. patents and license agreements with various biotechnology and pharmaceutical companies. PDL had pioneered the humanization of monoclonal antibodies which enabled the discovery of a new generation of targeted treatments for cancer and immunologic diseases for which it receives significant royalty revenue. In addition, PDL BioPharma provides non-dilutive growth capital and financing solutions to late stage public and private healthcare companies plus offers immediate financial monetization of royalty streams to companies, academic institutions and inventors. Through the addition of this strategy, PDL BioPharma deployed $368 million in capital in 2013 and $496 million in total to acquire new income generating assets which it uses to pay a forward dividend of $0.60 for a dividend yield of 7% under a 35% payout ratio. On Thursday, small cap PDL BioPharma rose 0.94% to $8.62 (PDLI has a 52 week trading range of $6.50 to $10.20 a share) for a market cap of $1.21 billion plus the stock is up 16.6% over the past year and up 36.8% over the past five years.
Endeavor IP Inc. Offering a portfolio approach to intellectual property investing that mitigates risk and maximizes returns, Endeavor IP is technology agnostic and applies modern investment management techniques to the patent sector to maximize returns and mitigate risk so that intellectual property holders can reap increased value for their patents. Basically, Endeavor IP owns a patent for smart meters – something that's bound to be installed in your home (if its not already installed now) by your utility company because they can eliminate the need for a meter reader plus help to cut power use and electricity bills. Other major participants in the smart meter industry have already entered a licensing agreement for the right to use the invention claimed under Endeavor IP's patent – meaning the company will collect royalties from them. Of course, a portion of these royalties are naturally used for litigation to protect Endeavor IP's patent rights and the company has been filing its share of patent infringement cases to protect its patent rights. Yesterday, Endeavor IP announced that its wholly-owned subsidiary Endeavor Energy, Inc., had filed a patent infringement lawsuit against Tucson Electric Power Company over a patent entitled "Remote Access Energy Meter System and Method." Then back in October, Endeavor IP also announced that its wholly-owned subsidiary, Endeavor MeshTech, Inc., had filed patent infringement lawsuits against two additional defendants (Aclara Technologies, Inc. and Sensus USA) over a patent entitled: "Wireless Communication Enabled Meter and Network." On Thursday, small cap Endeavor IP fell 6.67% to $0.70 (ENIP has a 52 week trading range of $0.20 to $1.28 a share) for a market cap of $29.96 million plus the stock is up 250% over the past year and up 6,900% since December 2011 according to data available on Google Finance.
No comments:
Post a Comment