3. InterDigital, Inc. (NASDAQ:IDCC)
52 Week Range: $74.65 – $140.60
Current Share Price: $135.08
Short % of Shares Outstanding: 17.50%
Number of Hedge Funds holding stakes as of Q2 2024: 29
InterDigital, Inc. (NASDAQ:IDCC) is a global research and development company specializing in wireless visual artificial intelligence and other related technologies. It designs and develops technologies that enable connection in a range of communications and entertainment products and services.
InterDigital, Inc. (NASDAQ:IDCC) remains in a strong position for future growth owing to its world-class wireless, video, and AI innovation, accelerating business momentum, and large addressable markets. Likewise, management has set out an ambitious plan to generate billions in annual recurring revenue and $600 million in adjusted EBITDA by 2030.
The $1 billion annual recurring revenue target comes on the company’s revenues more than doubling over the last four years due to improved execution across key business slimes. The company is targeting revenues of upwards of $200 million in its Consumer Electronics/Internet of Things segment. It’s also targeting $300 million in revenues in its video streaming segment.
InterDigital, Inc. (NASDAQ:IDCC) has shown strong financial stability by increasing its quarterly dividend payment from $0.40 to $0.45 per share, a move that will become official in the fourth quarter of 2024.
The firm also shared impressive financial outcomes for the second quarter of 2024, achieving revenues of $223 million and setting a new record for the first half of the year with $487 million. This strong performance has led InterDigital to revise its annual revenue forecast upward by $70 million, now anticipating revenues to fall between $690 million and $740 million.
Nevertheless, InterDigital, Inc. (NASDAQ:IDCC) remains one of the worst 52-week high stocks to buy, according to short sellers going by the high short interest of 17.50%. The pessimism stems from growing concerns that the company faces stiff competition from other tech companies with big balance sheets in developing advanced technologies, such as artificial intelligence.
By the end of 2024’s June quarter, 29 out of the 912 hedge funds part of Insider Monkey’s database had held a stake in the firm. InterDigital, Inc. (NASDAQ:IDCC) largest hedge fund investor is Spencer M. Waxman’s Shannon River Fund Management due to its $51.69 million investment.
Here is what FPA Queens Road Small Cap Value Fund said about InterDigital, Inc. (NASDAQ:IDCC) in its first quarter 2024 investor letter:
“InterDigital, Inc. (NASDAQ:IDCC) is a research and development organization that develops and acquires wireless and video patents across key technologies. The company has a history of strong financial performance, opportunistically buys back shares, and pays a modest dividend. IDCC has been successfully renewing its wireless licensing agreements (Apple in 2022, Samsung in 2023) and has a growing stream of recurring licensing revenues across consumer electronics, internet of things (IoT) and automotive customers. CEO Liren Chen joined IDCC in 2021 from Qualcom and has been hiring other former Qualcom managers. The company bought back $338m of stock last year and authorized another $300m buyback in its Q4 2023 earnings release.”
