Critical Comparison: Acacia Research (ACTG) vs. Finjan (FNJN)

Acacia Research (NASDAQ: ACTG) and Finjan (NASDAQ:FNJN) are both small-cap business services companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, analyst recommendations, valuation, institutional ownership, dividends, risk and profitability.

Volatility and Risk

Acacia Research has a beta of 1.01, suggesting that its stock price is 1% more volatile than the S&P 500. Comparatively, Finjan has a beta of -0.6, suggesting that its stock price is 160% less volatile than the S&P 500.

Earnings and Valuation

This table compares Acacia Research and Finjan’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Acacia Research $65.40 million 3.02 $22.18 million $2.97 1.31
Finjan $50.48 million 1.60 $22.81 million $0.35 8.34

Finjan has lower revenue, but higher earnings than Acacia Research. Acacia Research is trading at a lower price-to-earnings ratio than Finjan, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

61.7% of Acacia Research shares are owned by institutional investors. Comparatively, 44.1% of Finjan shares are owned by institutional investors. 11.0% of Acacia Research shares are owned by insiders. Comparatively, 9.6% of Finjan shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Acacia Research and Finjan, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Acacia Research 1 0 1 0 2.00
Finjan 0 0 2 0 3.00

Acacia Research presently has a consensus price target of $6.50, suggesting a potential upside of 66.67%. Finjan has a consensus price target of $5.00, suggesting a potential upside of 71.23%. Given Finjan’s stronger consensus rating and higher probable upside, analysts plainly believe Finjan is more favorable than Acacia Research.

Profitability

This table compares Acacia Research and Finjan’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Acacia Research 1.66% 42.95% 39.10%
Finjan N/A 95.86% 47.19%

About Acacia Research

Acacia Research Corporation, together with its subsidiaries, invests in, licenses, and enforces patented technologies. It assists patent owners with the prosecution and development of their patent portfolios; protection of their patented inventions from unauthorized use; generation of licensing revenue from users of their patented technologies; and enforcement against unauthorized users of their patented technologies through the filing of patent infringement litigation. The company owns or controls the rights to various patent portfolios, which include U.S. patents and foreign counterparts covering technologies used in a range of industries. It has executed approximately 1,550 license agreements and 193 patent portfolio licensing and enforcement programs. Acacia Research Corporation was founded in 1992 and is headquartered in Newport Beach, California.

About Finjan

Finjan Holdings, Inc., a cybersecurity company, provides intellectual property licensing and enforcement services in the United States and internationally. The company owns a portfolio of patents related to software and hardware technologies that proactively detect malicious code and thereby protects end users from identity and data theft, spyware, malware, phishing, Trojans, and other Web and network threats. Its patented technologies are used in specific cybersecurity technology areas, including endpoint/cloud software, Web gateway/Internet infrastructure, networking equipment markets, and mobile security. The company's technology scans and repels the latest and unknown threats to network, Web, and endpoint devices on a real-time basis. It also develops mobile security applications; invests in cybersecurity technologies and intellectual property; and provides cyber risk and cyber security advisory services provides. Finjan Holdings, Inc. was founded in 1997 and is headquartered in East Palo Alto, California.

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