On Tuesday, shares of the Mississauga-based tech 01 Communique (TSX:ONE) rocketed after the company received an order from the United States Court of Appeals for the Federal Circuit regarding the company’s appeal in its patent litigation against LogMeIn, remanding the case back to the district court for trial.
The news was a reversal from last year’s bombshell that the case would not go to trial.
Clarus Securities analyst Sean Peasgood likes what he sees from 01’s efforts to monetize its IP. He believes the company is at the tipping point of potentially unlocking significant value from its patent portfolio. Peasgood says Tuesday’s victory, which happened on the heels of recent settlement with Bomgar, could be the starting point for several licensing deals that could soon follow. Yesterday, the Clarus analyst initiated coverage of 01 Communique with a BUY rating and a 12-month target price of $2.90 per share.
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01 Communique was founded 1992, when it released a a fax program called 01 Fax. The company began developing remote access software in the late 1990’s, and filed for patents related to this technologies in 2000. 01 was subsequently granted two patents in August, 2005. Although it was the first company to actually be granted patents for remote access, other companies such as Citrix and Bomgar won the space, prompting 01 Communique to explore legal action around its intellectual property portfolio.
Peasgood says if 01 is successful in signing LogMeIn to an IP license, he believes the stock could be worth for than $5, as the market will build in additional licensing potential. His target price is based on a discounted cash flow model that assumes LogMeIn will sign a license in 2012 and Citrix will follow in 2013. The Clarus analyst believes 01 could generate recurring cash earnings per share of $0.37 cents a year with a license from both.
At press time, shares of 01 Communique were down 12.7% to $1.10.