Finjan to see new acquisitions on the back of one of its investments' ties with Alibaba

Finjan Holdings (NASDAQ:FNJN) provides investors with the opportunity to benefit from the monetization of a “proven portfolio” of security patents, according to analysts at H.C. Wainwright (HCW).

Analyst Amit Dayal noted Finjan’s “deep ties” in the security industry as one of the company’s strengths, giving the example of Finjan already being an investor in Jerusalem Venture Partners (JVP),  one of Israel’s largest security-focused venture capital firms.

On Monday, Jerusalem Venture Partners announced at its annual meeting that China’s Alibaba Group (NYSE:BABA) will be making an investment in the firm, becoming a strategic partner. The investment size was not disclosed.

“[Finjan] has committed $5M (of which $1M has been called) to a cyber security fund through Jerusalem Venture Partners,” wrote Dayal in the research note released earlier Tuesday.

“We believe over time this should allow the company to access a pool of innovative companies in the security industry with valuable patent assets. In our opinion, Finjan may not limit its partnership with JVP to only securing access to patents but could also choose to acquire operating cyber security businesses. 

“JVP’s partnership with the likes of Alibaba should broaden Finjan’s access to relevant opportunities,” he added.

As an operational company in its previous incarnation, Finjan was an early provider of behaviour-based security solutions and continues to invest in emerging technologies focused on cyber security.

HCW said it believes in the company’s potential and the ability to monetize its assets, having already successfully generated $145 million in licensing.

“We believe the risk reward profile for investors considering FNJN at current levels is highly favorable,” Dayal said.

“The stock is trading at all-time lows at a market cap of ~$50M, with ~$20M in cash and majority of the execution yet to come. The company has started to demonstrate results from its settlements driven strategy, and we believe new acquisitions will continue to support this strategy.”

H.C. Wainwright has a buy rating and $5.00 price target on Finjan, whose shares were trading up 3.4 percent today, at US$2.12 in New York. Year-to-date, the stock is down some 22 percent, and is trading near its 52-week low of US$1.97.

Story by ProactiveInvestors