Analyzing Acacia Research (ACTG) and ExlService (EXLS)

Acacia Research (NASDAQ: ACTG) and ExlService (NASDAQ:EXLS) are both industrials companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, analyst recommendations, earnings, institutional ownership, valuation, profitability and risk.

Valuation and Earnings

This table compares Acacia Research and ExlService’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Acacia Research $152.70 million 1.33 -$54.06 million $2.40 1.67
ExlService $685.99 million 2.98 $61.73 million $2.11 28.56

ExlService has higher revenue and earnings than Acacia Research. Acacia Research is trading at a lower price-to-earnings ratio than ExlService, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Acacia Research has a beta of 1.21, suggesting that its stock price is 21% more volatile than the S&P 500. Comparatively, ExlService has a beta of 1.26, suggesting that its stock price is 26% more volatile than the S&P 500.

Profitability

This table compares Acacia Research and ExlService’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Acacia Research 145.12% 50.75% 46.80%
ExlService 9.94% 14.81% 11.40%

Analyst Recommendations

This is a breakdown of current recommendations for Acacia Research and ExlService, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Acacia Research 1 0 1 0 2.00
ExlService 1 4 6 0 2.45

Acacia Research presently has a consensus price target of $6.50, suggesting a potential upside of 62.50%. ExlService has a consensus price target of $61.82, suggesting a potential upside of 2.59%. Given Acacia Research’s higher possible upside, analysts clearly believe Acacia Research is more favorable than ExlService.

Insider & Institutional Ownership

67.1% of Acacia Research shares are held by institutional investors. Comparatively, 92.1% of ExlService shares are held by institutional investors. 7.7% of Acacia Research shares are held by company insiders. Comparatively, 5.8% of ExlService shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

ExlService beats Acacia Research on 8 of the 14 factors compared between the two stocks.

Acacia Research Company Profile

Acacia Research Corporation, through its subsidiaries, invests in, licenses and enforces patented technologies. The Company’s operating subsidiaries partner with inventors and patent owners, applying their legal and technology expertise to patent assets to unlock the financial value in their patented inventions. The Company’s operating subsidiaries assist patent owners with the prosecution and development of their patent portfolios, the protection of their patented inventions from unauthorized use, the generation of licensing revenue from users of their patented technologies and, where necessary, with the enforcement against unauthorized users of their patented technologies through the filing of patent infringement litigation. The Company’s operating subsidiaries own or control the rights to multiple patent portfolios, which include the United States patents and certain foreign counterparts, covering technologies used in a range of industries.

ExlService Company Profile

ExlService Holdings, Inc. is an operations management and analytics company. The Company segments include Insurance; Healthcare; Travel, Transportation and Logistics; Finance and Accounting (F&A); Analytics, and All Other. The Insurance operating segment serves property and casualty insurance, life insurance, disability insurance, annuity and retirement services companies. The Healthcare operating segment serves healthcare payers and providers. The Travel, Transportation and Logistics operating segment primarily serves clients in the travel, transport and logistics industries. The F&A operating segment provides finance and accounting business process management (BPM) services across an array of F&A processes. The Analytics services focus on driving business outcomes for its customers by generating data-driven insights across all parts of its customers’ businesses. The All Other segment includes banking and financial services, utilities and consulting operating segments.

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