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Do Hedge Funds and Insiders Love InterDigital, Inc. (NASDAQ:IDCC)?

InterDigital, Inc. (NASDAQ:IDCC) was in 16 hedge funds’ portfolio at the end of the fourth quarter of 2012. IDCC investors should be aware of a decrease in activity from the world’s largest hedge funds in recent months. There were 17 hedge funds in our database with IDCC holdings at the end of the previous quarter.

InterDigital, Inc. (NASDAQ:IDCC)In today’s marketplace, there are plenty of methods investors can use to analyze stocks. A duo of the most underrated are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the top investment managers can outclass their index-focused peers by a significant margin (see just how much).

Just as beneficial, optimistic insider trading sentiment is another way to break down the marketplace. As the old adage goes: there are a variety of reasons for an executive to sell shares of his or her company, but only one, very simple reason why they would behave bullishly. Many academic studies have demonstrated the useful potential of this strategy if shareholders know what to do (learn more here).

Now, let’s take a peek at the latest action surrounding InterDigital, Inc. (NASDAQ:IDCC).

How are hedge funds trading InterDigital, Inc. (NASDAQ:IDCC)?

At year’s end, a total of 16 of the hedge funds we track were long in this stock, a change of -6% from the previous quarter. With hedge funds’ sentiment swirling, there exists a select group of key hedge fund managers who were increasing their holdings substantially.

According to our comprehensive database, Paulson & Co, managed by John Paulson, holds the biggest position in InterDigital, Inc. (NASDAQ:IDCC). Paulson & Co has a $123 million position in the stock, comprising 0.8% of its 13F portfolio. Coming in second is Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, which held a $81 million position; 0.4% of its 13F portfolio is allocated to the stock. Other hedgies with similar optimism include Spencer M. Waxman’s Shannon River Fund Management, Amy Minella’s Cardinal Capital and Jay Petschek and Steven Major’s Corsair Capital Management.

Seeing as InterDigital, Inc. (NASDAQ:IDCC) has experienced declining sentiment from the entirety of the hedge funds we track, logic holds that there lies a certain “tier” of fund managers that slashed their positions entirely in Q4. It’s worth mentioning that Robert Rodriguez and Steven Romick’s First Pacific Advisors LLC dropped the biggest investment of the 450+ funds we monitor, comprising about $73 million in stock., and Steven Cohen of SAC Capital Advisors was right behind this move, as the fund cut about $1 million worth. These transactions are important to note, as aggregate hedge fund interest was cut by 1 funds in Q4.

What have insiders been doing with InterDigital, Inc. (NASDAQ:IDCC)?

Insider trading activity, especially when it’s bullish, is at its handiest when the company we’re looking at has experienced transactions within the past 180 days. Over the latest six-month time frame, InterDigital, Inc. (NASDAQ:IDCC) has experienced zero unique insiders buying, and 5 insider sales (see the details of insider trades here).

With the returns exhibited by the aforementioned studies, everyday investors must always keep an eye on hedge fund and insider trading sentiment, and InterDigital, Inc. (NASDAQ:IDCC) is an important part of this process.

Click here to learn more about Insider Monkey’s Hedge Fund Newsletter

Insider Monkey’s small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.

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