(NASDAQ: SPEX) Full analyst report below
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Due Diligence Report: Surprise For Earnings Report: Possible and Likely
Summary:
Spherix Incorporated (Spherix), incorporated on May 1, 1992, is an intellectual property company that owns patented and unpatented intellectual property. The Company is a patent commercialization company that realizes revenue from the monetization of intellectual property. Such monetization includes, but is not limited to, acquiring intellectual property from patent holders and in conducting and managing a licensing campaign. The Company’s activities generally include the acquisition and development of patents through internal or external research and development. In addition, the Company seeks to acquire existing rights to intellectual property through the acquisition of already issued patents and pending patent applications, both in the United States and abroad. The Company develops products and processes associated with its intellectual property and license its intellectual property to others seeking to develop products or processes or whose products or processes infringe its intellectual property rights through legal processes. Some patent holders tend to have limited internal resources and/or expertise to address the unauthorized use of their patented technologies or they simply make the business decision to outsource their intellectual property licensing. They can include individual inventors, large corporations, universities, research laboratories and hospitals
Spherix Incorporated has a current market capitalization of $4.95 M with 2.55 M outstanding shares. Its daily average volume traded is 129,195 shares.
Financial Highlights (Q3 2015):
Revenue: Nil
Gross Profit: Nil
Net Income: -2.73 M
Cash and Cash Equivalents: 0.93 M
Total Debt: 0.45 M
Recent News and Analysis:
The company recently announced that the Company had executed an additional agreement to monetize the Nortel patents with Equitable IP Corporation, a leading patent enforcement and monetization fund. Following the initial agreement with Equitable to collaborate on the monetization of the CompuFill patent portfolio, Spherix has signed a new agreement with Equitable, involving the monetization of certain Nortel and North South assets. The Company believes there is widespread infringement of these patents and the total addressable market for the Nortel patents exceeds $50 Billion. The new agreement not only focuses on an extremely valuable portion of the Spherix portfolio, but it also awards economic incentives to Equitable for expeditiously commencing litigation.
Anthony Hayes, CEO of Spherix, said, “We are pleased to announce an additional agreement with our partners at Equitable. This cooperative effort will allow Spherix and Equitable to work together to monetize the substantial value of our patent portfolio. By commencing their work and legal initiatives before May 1, 2016, Equitable will be the beneficiary of a measured yet robust incentive arrangement. Of the 10 new suits that we expect to file, at least seven must apply to the Nortel patents, while two must be against licensees that have public market capitalizations in excess of $1 billion. As stated in our recent shareholder letter, this new agreement helps to broaden potential revenue generation for our shareholders.”
The institutional sentiment decreased to 0.38 in Q3 2015. It’s down 0.29, from 0.67 in 2015Q2. The ratio dived, as 4 funds sold all Spherix Inc shares owned while 4 reduced positions. 2 funds bought stakes while 1 increased positions. They now own 293,585 shares or 69.32% less from 956,796 shares in 2015Q2. Citadel Advisors LLC holds 0% of its portfolio in Spherix Inc. for 61,372 shares. Citigroup Inc. owns 48 shares or 0% of their US portfolio. Moreover, Creative Planning has 0% invested in the company for 4 shares. The Massachusetts-based Geode Capital Management LLC has invested 0% in the stock. Goldman Sachs Group Inc., a New York-based fund reported 59,267 shares.
Conclusions:
The stock decreased 10.91% or $0.24 on March 18, hitting $1.96. About 195,018 shares traded hands. Spherix Inc. (NASDAQ: SPEX) has declined 87.84% in the last 52 weeks and is downtrending. It has underperformed the S7P 500 by 49.03%. The move comes after 5 months negative chart setup for the $4.45 million company. Analysts have a $1.91 PT which indicates a downside of about 2.55%. However, analysts are awaiting earnings to be reported on April 4h. Given the recent news and indication of revenue generation beginning in the near future, it is not wild to assume the company may surprise with the earnings report. However, it is difficult to predict how much revenue the company will generate leading to difficulty in estimating a price target for the company. The price has declined, but there is a real business behind the unimpressive financials that will produce free cash flow in the future.
Sources:
- http://www.reuters.com/finance/stocks/companyProfile?rpc=66&symbol=SPEX.O
- https://www.google.ca/finance?q=NASDAQ%3ASPEX&hl=en&gl=ca&ei=t4DsVpniMNWyjAGe-r6QBA
- http://finance.yahoo.com/q?s=spex&ql=1
- https://www.google.ca/finance?q=NASDAQ%3ASPEX&fstype=ii&hl=en&gl=ca&ei=yIDsVrmTK4SA2AaLz7vwCA
- http://finance.yahoo.com/news/spherix-executes-joint-venture-agreement-123000859.html
- http://www.smallcapwired.com/can-spherix-incs-tomorrow-be-different-the-stock-declines-again/88531/
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