Hedge Funds Are Dumping Tessera Technologies, Inc. (TSRA)

Is Tessera Technologies, Inc. (NASDAQ:TSRA) a good investment?

Now, according to many of your fellow readers, hedge funds are assumed to be overrated, outdated investment tools of a forgotten age. Although there are In excess of 8,000 hedge funds in operation currently, Insider Monkey focuses on the upper echelon of this club, around 525 funds. Analysts calculate that this group has its hands on the majority of all hedge funds’ total assets, and by monitoring their highest performing investments, we’ve come up with a number of investment strategies that have historically beaten the S&P 500. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points a year for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have beaten the S&P 500 index by 33 percentage points in 11 months (find the details here).

Just as necessary, bullish insider trading sentiment is a second way to analyze the stock market universe. As the old adage goes: there are plenty of reasons for a bullish insider to drop shares of his or her company, but only one, very clear reason why they would initiate a purchase. Various empirical studies have demonstrated the market-beating potential of this method if investors understand what to do (learn more here).

What’s more, let’s examine the recent info about Tessera Technologies, Inc. (NASDAQ:TSRA).

What does the smart money think about Tessera Technologies, Inc. (NASDAQ:TSRA)?

Heading into Q3, a total of 14 of the hedge funds we track were bullish in this stock, a change of -13% from the previous quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were boosting their stakes meaningfully.

When using filings from the hedgies we track, Starboard Value LP, managed by Jeffrey Smith, holds the most valuable position in Tessera Technologies, Inc. (NASDAQ:TSRA). Starboard Value LP has a $84.8 million position in the stock, comprising 5.9% of its 13F portfolio. On Starboard Value LP’s heels is Steven Cohen of SAC Capital Advisors, with a $67.2 million position; the fund has 0.4% of its 13F portfolio invested in the stock. Other hedge funds that hold long positions include D. E. Shaw’s D E Shaw, Jim Simons’s Renaissance Technologies and Ryan Frick and Oliver Evans’s Dorsal Capital Management.

Due to the fact Tessera Technologies, Inc. (NASDAQ:TSRA) has experienced a fall in interest from the entirety of the hedge funds we track, it’s easy to see that there lies a certain “tier” of money managers that elected to cut their entire stakes in Q1. Interestingly, David Einhorn’s Greenlight Capital cut the biggest investment of the “upper crust” of funds we key on, comprising an estimated $13 million in stock, and Mark N. Diker of Diker Management was right behind this move, as the fund dumped about $5.5 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest was cut by 2 funds in Q1.

What have insiders been doing with Tessera Technologies, Inc. (NASDAQ:TSRA)?

Insider buying made by high-level executives is most useful when the company in question has seen transactions within the past 180 days. Over the last half-year time period, Tessera Technologies, Inc. (NASDAQ:TSRA) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

We’ll go over the relationship between both of these indicators in other stocks similar to Tessera Technologies, Inc. (NASDAQ:TSRA). These stocks are Brooks Automation, Inc. (USA) (NASDAQ:BRKS), Entegris Inc (NASDAQ:ENTG), ATMI Inc (NASDAQ:ATMI), Kulicke and Soffa Industries Inc. (NASDAQ:KLIC), and Ultratech, Inc. (NASDAQ:UTEK). This group of stocks are in the semiconductor equipment & materials industry and their market caps match TSRA’s market cap.