Global Maxfin Capital analyst Ralph Garcea says despite the recent setback in its infringement case against LogMeIn, 01 Communique (TSX:ONE) has a number of catalysts that can help mend the beating the company’s stock has taken in the time since.
On March 26th, A federal jury in Eastern District of Virginia found that LogMeIn products do not infringe on 01 Communique’s ‘479 patent. The news sent shares of the Canadian junior reeling, from a high of $1.38 in the weeks preceding the case, to recent lows near the twenty cent mark.
But Garcea says not only does the company have an upcoming hearing in patent litigation case against Citrix Systems, on May 8th, but the LogMeIn case had a silver lining. The LogMeIn verdict validated the ‘479 patent, which should help in the Citrix case, he says.
The Global Maxfin analyst says he fully expects 01 Communique to appeal the LogMeIn ruling, which could be another catalyst. Without expressly saying so, the company today more or less confirmed his assessment.
In a press release today, CEO Andrew Cheung said “We disagree with the finding of non-infringement and, with the entry of the judgment by the court, we can now proceed with efforts to have that part of the verdict reversed”. He added: “While we were disappointed and disagree with the finding of non-infringement in the LogMeIn case, the confirmation of the validity of the 479 patent clears another hurdle for us to have our day in court with Citrix.”
Garcea, who has a STRONG BUY rating and $1.50 target on 01 Communique, says that with more than $4.1-million in the bank and a burn rate of about $400,00 per quarter, the company has enough runway to execute on its strategy. CFO Brian Stringer today said ONE would take additional steps to reduce its cash operating expenses.
Disclosure: Cantech Letter’s Nick Waddell purchased 35,000 shares of 01 Communique at $.235 on March 28th.