New: RocketCap Intellectual Property Stock Market Index for IP Design Firms (RIPSID)

Posted on August 2nd, 2011 by admin in Intellectual Property, Market Indexes, Technology

RIPSI is the stock market index that measures the IP asset value of key firms in the eco-system for design engineering in mechanical, industrial,  architectural and electronics industries. RIPSI consists of firms that specialize in IP enforcement, IP tools, and IP designs themselves. It turns out that the pure-play providers of intellectual property for the design of client products are all focused on the electronics industry. Our new index consists only of  the providers of design IP for the electronics industry.

The RocketCap Intellectual Property Stock Index for Design (RIPSID) consists of 8 pure-play IP providers, 7 of which are already part of RIPSI  (the “Designers”). Wi-LAN, Inc. is newly added. Wi-LAN meets all the three criteria we stated in defining RIPSI, except it has been trading on a USA stock exchange (NasdaqGS) only since 1 JUNE 11. Thus, our index values start on 1 JUNE 11.

The RIPSID consists of these component firms:

Designers Symbol
MIPS Technologies MIPS
CEVA, Inc. CEVA
Tessera Technologies TSRA
Rambus, Inc. RMBS
InterDigital, Inc. IDCC
Dolby Laboratories DLB
ARM Holdings ARMH
Wi-LAN, Inc. WILN

 

As we did for the component firms of RIPSI, we analyze the IP Monetization Efficiency for the Designers. The result, based on latest data from Google Finance on 6-2-2011, is shown in the chart below.

IP Monetization Efficiency of RIPSID design firms as of 8-2-2011

 

 

 

 

 

 

 

 

 

ARMH and WILN are the extremes of IP value and IP Leverage, respectively, while DLB and IDCC are more balanced in both value and efficiency.

The gross returns of RIPSID for the last two months ending on 6-1-2011, compared to the gross returns for the S&P 500 and for RIPSI are here:

Gross ROIs for RIPSID vs RIPSI vs S&P 500 for 2 month period ending 8-1-2011

 

 

 

 

 

 

 

 

Here are the gross returns for the same time period for all the individual firms in RIPSID:

RIPSID firms' gross ROIs over 2 month period ending 8-1-11

 

 

 

 

 

 

 

 

It’s useful to note that on 7-21-11, Interdigital’s stock (IDCC) made a huge jump on a news report that Google might consider acquiring IDCC for their patent portfolio. This jump has somewhat skewed both RIPSI and RIPSID.

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