Xenith IP Group Limited (ASX: XIP) is leading a group of highly qualified businesses which are operating in the field of intellectual property (IP) services. The group provides traditional IP services with complementary advisory services. Some of the companies in the group are
- Shelston IP, one of the leading specialist intellectual property firms in Australia.
- Griffith Hack, one of the largest filers of patents and trademarks.
- Watermark offers intellectual asset management advise.
The company has more than 400 personnel which includes 175 IP professionals. The services are provided across Australia, New Zealand, Asia, US, and Europe to the client base of large MNCs, start-ups, research groups, universities, etc.
From the past few months, the stock has been on a constant rise and not looking to stop anytime soon. It has already made its 52 weeks high at A$2.12 as of 12th April 2019. The rally is being supported by good increase in the trading volumes as compared to previous years, which validates the sustenance of the rally. This buying has majorly been initiated by strong hands from the lower levels. But how did they catch the rally? How did the stock fall in the radar of these investors?
In the entire year of 2018, the stock had moved in a range of A$1.10 - A$1.53. Surprisingly the exact low of A$1.10 was made three times in the year (on the weekly chart) making this level to be an excellent demand zone for the stock. But in 2019 the stock had its plans to surprise the street after one year of the laggard move.
In order to start a rally, the stock had to pass the resistance of A$1.53 which was the highest level of the range for the previous year. On 13th February 2019, IPH Limited announced that it had acquired a massive 19.9% stake in the company. The acquisition took place at an average price of $1.85 per share from institutional investors for a total cost of about $33 million. This acquisition provided so much fuel for the stock that breaching the resistance in old school way was not an option; instead, it opened by a massive gap of 24.5% at A$1.75 leaving the resistance way behind the current price. This was the first time that the stock started to make a buzz on the street and active investors were not just watching from the side-lines, they were getting in. After this massive breakout, the stock came down to test the newly found support levels (previous resistance) which is a classic behaviour when the technical analysis is considered.
After touching A$1.4 – A$1.5 the stock started to rise again, there was another surprise waiting for the investors. On 12th March 2019, IPH submitted a proposal to acquire the entire stake in Xenith. Earlier the stock went crazy on the 19.9% stake acquisition by IPH but this time 100% stake acquisition had been offered. Again, as expected, the stock supercharged and opened by a good gap and made a new 52 week high of A$1.85 on 12th March 2019. It provided a second chance for investors who couldn't enter after the first announcement.
Since these two announcements, the stock is continuously going higher and revising its 52-week high. The developments regarding IPH’s proposal to acquire 100% stake in Xenith is underway and the street is keenly following the developments.