Wednesday, August 1, 2007

Acacia Research - CombiMatrix

Acacia Research - CombiMatrix is a NASDAQ listed security that has been trading in a range between $0.50 and $1.85 over the past year. With 52,788,840 shares outstanding, a recent price of $0.61 gives a total market capitalization of $35,368,524. While there are certainly larger companies, Acacia Research - CombiMatrix has definitely earned its place in the pack. Last year, Acacia Research - CombiMatrix created $-0.36 in earnings for every share outstanding.

Acacia Research - CombiMatrix is currently priced by the market at 0.00 times last year’s earnings. Many trading multiples around the world are quite attractive these days, but don’t be fooled. A Price to Earnings ratio of 0 simply means that the security didn’t make any money last year.

With a share price under $50 a share and earnings per share below $1 a share, Acacia Research - CombiMatrix is unlikely to be an interesting value proposition. Consistent earnings are the key to high valuations and this security is not on its way.