RPX Corporation (RPX)

I keep going through the Forbes America's Best Small companies list. I
thought RPX Corporation had a unique business idea and interesting
values.

The company is referred to as a patent troll killer. Its subscription based, and all the big companies that depend on patents subscribe. In addition it's a patent trading platform, which may give it another leg to stand on in the unlikely event that the U.S. gets control over it's runaway patent regulations.

Not quite sure how to value this company though. It trades at less than 6 EV/EBIT TTM. DCF valuation based on FCF gives a MOS of 66% with a discount rate of 15%. DCF valuation based on EPS gives a very different and worse picture though.

Here is an article Brian Grosso wrote about the company over at Seeking Alpha. RPX Corp.: 6x EV/FCF For This Patent Troll Killer





Full disclosure: Long RPX since yesterday.