Hedge Funds Remain Cautious When It Comes To Tessera Technologies, Inc. (TSRA)

You probably know from experience that there is not as much information on small-cap companies as there is on large companies. Of course, this makes it really hard and difficult for individual investors to make proper and accurate analysis of certain small-cap companies. However, well-known and successful hedge fund investors like Carl Icahn and George Soros hold the necessary resources and abilities to conduct an extensive stock analysis on small-cap stocks, which enable them to make millions of dollars by identifying potential winners within the small-cap galaxy of stocks. This represents the main reason why Insider Monkey takes notice of the hedge fund activity in these overlooked stocks.

Tessera Technologies, Inc. (NASDAQ:TSRA) was in 29 hedge funds’ portfolios at the end of September. TSRA shareholders have witnessed an increase in activity from the world’s largest hedge funds recently. There were 28 hedge funds in our database with TSRA positions at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Chemours Co (NYSE:CC), Houlihan Lokey Inc (NYSE:HLI), and GoPro Inc (NASDAQ:GPRO) to gather more data points.

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

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Hedge fund activity in Tessera Technologies, Inc. (NASDAQ:TSRA)

Heading into the fourth quarter of 2016, a total of 29 of the hedge funds tracked by Insider Monkey were bullish on this stock, a rise of 4% from one quarter earlier. There have been small boosts in hedge fund ownership of the stock over the past 2 quarters, though ownership remains below where it was a year earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Jim Simons’ Renaissance Technologies has the most valuable position in Tessera Technologies, Inc. (NASDAQ:TSRA), worth close to $88.8 million. The second largest stake is held by Trigran Investments, managed by Douglas T. Granat, which holds a $49.2 million position; 12.9% of its 13F portfolio is allocated to the company. Remaining peers with similar optimism contain Spencer M. Waxman’s Shannon River Fund Management, Chuck Royce’s Royce & Associates, and David E. Shaw’s D E Shaw.

As one would reasonably expect, specific money managers have jumped into Tessera Technologies, Inc. (NASDAQ:TSRA) headfirst. Ionic Capital Management, managed by Bart Baum, created the largest position in Tessera Technologies, Inc. (NASDAQ:TSRA). Ionic Capital Management had $2.4 million invested in the company at the end of the quarter. Steve Cohen’s Point72 Asset Management also initiated a $1 million position during the quarter. The other funds with new positions in the stock are Mike Vranos’ Ellington, Frank Slattery’s Symmetry Peak Management, and Ken Griffin’s Citadel Investment Group.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Tessera Technologies, Inc. (NASDAQ:TSRA) but similarly valued. We will take a look at Chemours Co (NYSE:CC), Houlihan Lokey Inc (NYSE:HLI), GoPro Inc (NASDAQ:GPRO), and Ollie’s Bargain Outlet Holdings Inc (NASDAQ:OLLI). All of these stocks’ market caps match TSRA’s market cap.

As you can see these stocks had an average of 21 hedge funds with bullish positions and the average amount invested in these stocks was $285 million. That figure was $302 million in TSRA’s case. Chemours Co (NYSE:CC) is the most popular stock in this table. On the other hand Houlihan Lokey Inc (NYSE:HLI) is the least popular one with only 10 bullish hedge fund positions. Tessera Technologies, Inc. (NASDAQ:TSRA) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard CC might be a better candidate to consider a long position in.

Disclosure: None