5-Star Stocks Poised to Pop: RPX

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Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, patent risk management specialist RPX (NAS: RPXC) has earned a coveted five-star ranking.

With that in mind, let's take a closer look at RPX's business and see what CAPS investors are saying about the stock right now.

RPX facts

Headquarters (founded)San Francisco (2008)
Market Cap$818.4 million
IndustryResearch and consulting services
Trailing-12-Month Revenue$141.3 million
ManagementCo-Founder/CEO John Amster
Co-Founder/COO Geoffrey Barker
Trailing-12-Month Return on Equity14.5%
Cash/Debt$250.0 million / $6.1 million
CompetitorsAcadia Research
Jones Day
Walker Digital

Source: S&P Capital IQ and Motley Fool CAPS.

On CAPS, all 68 members who have rated RPX believe the stock will outperform the S&P 500 going forward.

Earlier this month, one of those bulls, All-Star DaddioResources, tapped RPX (short for Rational Patent Exchange) as a particularly timely opportunity:

Rational patent is ultimately a response to the growing trend of patent litigation. ... Companies with patent concerns can manage this risk by buying a membership in Rational Patent.

RPX holds a portfolio of some 1,600 patents -- nearly all of them from marquee names from the high-tech sector -- and clients pay RPXC $60,000 to $6.6 million a year to license all of the patents and thus avoid trampling on anyone else's proprietary technology.

Rational Patent then uses its revenue to buy more patents, which attracts more members, and so it goes.

There are about 2,500 companies that could benefit from a membership, which gives RPX a huge amount of growth potential.

What do you think about RPX, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!

Want to see how well (or not so well) the stocks in this series are performing? Follow the newTrackPoisedToCAPS account.

At the time this article was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Motley Fool newsletter services have recommended writing covered calls in RPX. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.

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