Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link. Trade-Ideas LLC identified Acacia Research Corporation ( ACTG) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Acacia Research Corporation as such a stock due to the following factors:
- ACTG has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $14.6 million.
- ACTG has traded 591,769 shares today.
- ACTG is up 3.4% today.
- ACTG was down 6.3% yesterday.
EXCLUSIVE OFFER: Get the inside scoop on opportunities in ACTG with the Ticky from Trade-Ideas. See the FREE profile for ACTG NOW at Trade-Ideas More details on ACTG: Acacia Research Corporation, through its subsidiaries, acquires, develops, licenses, and enforces patented technologies in the United States. The stock currently has a dividend yield of 3.4%. Currently there are 3 analysts that rate Acacia Research Corporation a buy, no analysts rate it a sell, and 1 rates it a hold. The average volume for Acacia Research Corporation has been 678,600 shares per day over the past 30 days. Acacia Research has a market cap of $743.9 million and is part of the services sector and diversified services industry. The stock has a beta of 1.00 and a short float of 17% with 8.08 days to cover. Shares are up 2.5% year-to-date as of the close of trading on Friday. STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more. TheStreetRatings.com Analysis: TheStreet Quant Ratings rates Acacia Research Corporation as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share. Highlights from the ratings report include:
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Professional Services industry. The net income has significantly decreased by 439.3% when compared to the same quarter one year ago, falling from $9.82 million to -$33.33 million.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Professional Services industry and the overall market, ACACIA RESEARCH CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has significantly decreased to $1.31 million or 96.18% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 47.02%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 445.00% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- ACACIA RESEARCH CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, ACACIA RESEARCH CORP swung to a loss, reporting -$1.17 versus $1.28 in the prior year. This year, the market expects an improvement in earnings ($1.42 versus -$1.17).
- You can view the full Acacia Research Corporation Ratings Report.
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.