Back to top

Analyst Blog

Recently, Tessera Technologies, Inc. (TSRA - Analyst Report) declared that its subsidiaries Tessera, Inc. and Invensas Corp. have entered into new patent license agreements with Samsung. However, the specific terms and conditions of the agreements have been kept confidential.

Tessera Technologies is a San Jose, CA-based technology company, which develops licenses and delivers innovative miniaturization technologies and products for electronic devices worldwide. Since the sale of 200-odd patents and applications from its DigitalOptics business, the company has become more of a patent licensing.

Tessera, Inc., one of its subsidiaries, is a semiconductor packaging company whereas Invensas Corp. devises solutions for semiconductor technologies.

With this agreement, Tessera aims to strengthen its existing relationship with Samsung. Considering Samsung’s market position and growth prospects, the extended relationship with this consumer electronics company should be very good for Tessera. While the exact impact on revenue remains under wraps, we may expect a nice increase.

Tessera’s largest segment was always Intellectual Property, but given its size, the company faced great difficulty protecting its patents from much larger players with deeper pockets because they could afford lengthy and expensive litigation. This led the company to manufacture devices based on its own technology. This naturally came with its own challenges, in addition to lower margins.

Tessera’s present transition to a patent-licensing model is largely creditable to its largest shareholder, Starboard Value LP. Starboard is something of a veteran at monetizing patent assets, which is leading to the current changes at Tessera.

Earlier this month, Tessera announced that it would stop its operations at its DigitalOptics business and concentrate on its intellectual property division. It also intends to reduce operating costs.

Tessera currently carries a Zacks Rank #4 (Sell).

Better-ranked stocks from the same sector include Ultra Clean Holdings Inc. (UCTT - Snapshot Report), Arris Enterprises, Inc. (ARRS - Analyst Report), both carrying a Zacks Rank #1 (Strong Buy), and, Aspen Technology, Inc. (AZPN - Snapshot Report) with a Zacks Rank #2 (Buy).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
UNITED THER… UTHR 117.83 +28.51%
TRIQUINT SE… TQNT 20.67 +6.52%
RF MICRO DE… RFMD 12.47 +6.04%
VASCO DATA… VDSI 14.77 +4.68%
BANCO DO BR… BDORY 15.53 +3.95%