These 3 tech tickers beat the market, June 23 – June 27
VirnetX gained 7.3%,
thanks to a big
The big move:
• VirnetX enjoyed a massive volume spike on Tuesday morning.
• In the span of just one hour, more than twice the stock’s
average daily volume had shifted hands, driving share prices
• Somebody is creating a big position in VirnetX right here, or
adding to an existing one.
• The stock is a popular component in small-cap and growth
• Still, only 55% of VirnetX’s float is held by insiders and
institutions, leaving a large portion in the hands of retail
Okay, but why the big buy-in?
• This surge appears to be a delayed reaction to an earlier
favorable patent review decision.
• The U.S. Patent and Trademark Office denied all seven
petitions by RPX Corporation to review four of VirnetX’s
wireless security patents.
• The USPTO noted that Apple is a common denominator
between all of RPX’s review filings, being sued for using all of
the relevant patents.
• Apple’s own petitions have already been denied. Using middle-
men to try again is a big no-no.
• Moreover, the time limits for starting these patent reviews
have already expired.
The big VirnetX takeaway:
• Apple lost one effective tool in the VirnetX patent battles, but the appeals process
• The stakes are high, as VirnetX seeks billion-dollar payouts but is not likely to survive if
the legal tide turns against the company.
• The final outcome of Apple’s defense will be cited and followed in other patent
conflicts. This battle is setting the tone for the entire war.
• Right now, VirnetX looks like a winner. The question is, how far will Apple push its legal
options? This is the kind of bellwether conflict that can go all the way to the Supreme
• VirnetX is sitting pretty right now but the stock remains risky. Investors are betting on a
long string of perfect outcomes, none of which are guaranteed.
• One bad day in court could bring the whole enterprise to its knees. Please be careful
with this poker chip of a stock.
Ambarella surged sky-high on Tuesday.
The excitement faded a bit, but the
stock still had a great week.
What happened on Tuesday?
• Ambarella makes the video processing chips at
the heart of GoPro cameras.
• GoPro’s wild IPO also drove huge interest in
Ambarella and other stocks with GoPro
• Moreover, Google just bought Dropcam. The
video camera space is simply red-hot right
now, which is great news for components
suppliers like Ambarella.
There’s more to the Ambarella story
• Ambarella might sound like a flash in the pan,
but don’t write it off too quickly.
• The company is showing positive earnings and
cash flows, along with 20% annual sales growth.
• On Ambarella’s balance sheet, you’ll find $156
million of cash reserves but no debt.
• GoPro may be the richest feather in Ambarella’s
cap, but the company is set up to thrive even if
its target market sags for a while.
Finally, Universal Display gained 6.3%
for the week.
That includes an 8% jump on Friday.
Universal Display’s catalyst
• Universal Display rose as big-name analyst firm
Goldman Sachs reiterated its “buy” rating on the stock.
• Goldman analyst Brian Lee also raised his target price
from $42 to $44 per share.
• The stock currently trades near $31.25, including the
analyst note’s self-fulfilling prophecy powers, leaving
lots of growth to do before hitting Goldman’s new
What does Goldman see in this stock?
“We believe OLED is one the more underappreciated product cycle
stories in our coverage, with new product and customer-driven
catalysts lining up to drive stock outperformance [in the second half of
2014].” said Lee.
He likes Universal Display’s product pipeline, but the stock is also
positioned for big gains in the near term. Lee provided 3 main reasons
• Investor sentiment is too negative on this stock.
• Shares are attractively valued today.
• As the market for OLED product moves into the mainstream,
Universal Display is executing crisply on new business
Apple hopes to sell millions of iWatches…
but not without this small-cap