Friday, January 21, 2011

Acacia Research ( Nasdaq - ACTG ) -- Follow-up Report

Acacia Research (ACTG $27.50) appears on track to report excellent on target Q4 results.  As expected, the company didn't complete any large deals in the period.  Earlier in the year Acacia licensed all the patents it controls to Oracle and Microsoft in separate transactions, boosting performance sharply in those periods.  Our estimates reflect a generally breakeven showing in the December quarter.  Acacia did end the year with about 180 patent portfolios, and the company continues to accumulate intellectual property at a fast pace.  Individual settlements are likely to keep expanding in number during 2011.  Acacia remains confident it will consummate three large transactions this year, as well.  Investment requirements remain modest.  So most income is likely to turn into into cash flow.  Acacia may invest that money in patents directly, eliminating the need to split its winnings with existing patentholders.  Dividends and buybacks are a possibility, as well.

( Click on Table to Enlarge. )

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