NEW YORK, April 20, 2017 /PRNewswire/ -- On April 7, 2017, Devonshire Research Group issued an in-depth analysis of Allied Minds (LON: ALM), a Boston-based venture firm trading on the London Stock Exchange with investments in the life science and technology sectors. The report describes the rationale behind Devonshire's short position on Allied Minds. Devonshire Research Group argues that Allied Minds is overvalued because it has not to date demonstrated success in identifying and monetizing technology, and has limited potential to do so going forward. ALM's share price has plummeted in recent days, a decline that reflects a broader loss of confidence in the licensing-based business models of stocks like ALM - publicly traded intellectual property companies, known as PIPCOs.
Allied Minds has built a portfolio of investments in university-based technologies via seed stage startups at early stages of technology readiness. The technologies in Allied Minds' portfolio, while promising in some respects, are typically many years away from commercialization and have many potential failure points ahead of them. While Allied Minds has had limited successful monetization events or exits in their portfolio to date, they have seen an average of two of their startup investments going out of business per year, with a cumulative total of twelve startup investment failures since 2010.
Devonshire Research Group has conducted a comprehensive assessment of the value potential in each of Allied Minds' subsidiaries. For businesses with little to no revenue, this is typically quite difficult to do, but Devonshire's analysis applies sophisticated patent analysis tools to evaluate the intellectual property positions of each of Allied Minds' investment positions. The report concludes that the subsidiaries lack the requisite IP to be competitive in the markets they are attempting to enter and possess patent portfolios that are both smaller and less central than their competitors.
In addition to the comprehensive assessment of its subsidiary technologies, the Devonshire Research Group report also compares Allied Minds to other PIPCOs. Allied Minds has long based its technology business development around university based technologies protected by patents. Relative to other PIPCO's, however, Allied Minds compares unfavorably: its subsidiaries have little to no licensing revenue, the early-stage technologies protected by its patents are many years away from commercialization and its modest-sized patent portfolio is highly fragmented. Based on the combination of its patent portfolio assessment and the comparison to peers, Devonshire Research Group argues that ALM's stock price is overvalued even after its sharp recent declines. The full report is available for download at www.devonshireresearch.com.
About Devonshire Research Group
Devonshire Research Group, LLC is a Registered Investment Adviser pioneering advanced analytical methods and machine learning techniques in uncovering overstated assets, investments, and companies. The firm advises its clients on hard-to-value and illiquid asset portfolio risks, valuation exposures, and periodically publishes public research.
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SOURCE Devonshire Research Group