February 22, 2013
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of intellectual property firm Acacia Research (NASDAQ: ACTG ) jumped 13% briefly at the open of trading, after announcing earnings.
So what: The company's revenue more than tripled, to $66.3 million, and net income doubled, to $9.8 million, or $0.20 per share. Analysts only expected $41.4 million in revenue, and earnings per share of $24, which compares to the $0.84 of adjusted EPS Acacia reported.
Now what: The momentum that the business saw is very strong and, with shares trading at just 11 times forward earnings, there's plenty of upside potential. Results tend to be lumpy, but with revenue trending higher throughout 2012, and a growing patent portfolio, we can expect some certainty going forward. I think there's upside from here, especially considering the drop shares had later in trading to near flat on the day.
Interested in more info on Acacia Research? Add it to your watchlist by clicking here.
More Expert Advice from The Motley Fool
The Motley Fool's chief investment officer has selected his No. 1 stock for the next year. Find out which stock in our brand-new free report: "The Motley Fool's Top Stock for 2013
." I invite you to take a copy, free for a limited time. Just click here
to access the report and find out the name of this under-the-radar company.