Tessera Technologies, Inc. (TSRA): Are Hedge Funds Right About This Stock?

The 700+ hedge funds and money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the third quarter, which unveil their equity positions as of September 30. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund positions. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Tessera Technologies, Inc. (NASDAQ:TSRA).

Is Tessera Technologies a buy, sell, or hold? The smart money is getting more bullish. The number of long hedge fund positions went up by 4 recently. 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 Korn/Ferry International (NYSE:KFY), LogMeIn Inc (NASDAQ:LOGM), and Gannett Co., Inc. (NYSE:GCI) to gather more data points.

To most investors, hedge funds are assumed to be slow, old investment vehicles of years past. While there are more than 8000 funds trading today, Our experts look at the moguls of this group, about 700 funds. These hedge fund managers shepherd most of the smart money’s total asset base, and by monitoring their finest investments, Insider Monkey has spotted several investment strategies that have historically outpaced the market. Insider Monkey’s small-cap hedge fund strategy surpassed the S&P 500 index by 12 percentage points a year for a decade in their back tests.

Keeping this in mind, let’s analyze the fresh action surrounding Tessera Technologies, Inc. (NASDAQ:TSRA).

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

Heading into Q4, a total of 34 of the hedge funds tracked by Insider Monkey were long this stock, a change of 13% from one quarter earlier. With hedge funds’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were increasing their holdings significantly (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Jim Simons’ Renaissance Technologies has the largest position in Tessera Technologies, Inc. (NASDAQ:TSRA), worth close to $49.7 million, corresponding to 0.1% of its total 13F portfolio. The second largest stake is held by Clearline Capital, led by Marc Majzner, holding a $43.7 million position; 7.4% of its 13F portfolio is allocated to the stock. Some other hedge funds and institutional investors that are bullish include Paul Orlin and Alex Porter’s Amici Capital, Joel Greenblatt’s Gotham Asset Management and Spencer M. Waxman’s Shannon River Fund Management.

As one would reasonably expect, some big names were breaking ground themselves. Visium Asset Management, managed by Jacob Gottlieb, created the largest position in Tessera Technologies, Inc. (NASDAQ:TSRA). Visium Asset Management had $4.9 million invested in the company at the end of the quarter. Chao Ku’s Nine Chapters Capital Management also made a $1.3 million investment in the stock during the quarter. The other funds with brand new TSRA positions are Peter Algert and Kevin Coldiron’s Algert Coldiron Investors, Ken Gray and Steve Walsh’s Bryn Mawr Capital, and David Dreman’s Dreman Value Management.

Let’s now take a look at hedge fund activity in other stocks similar to Tessera Technologies, Inc. (NASDAQ:TSRA). These stocks are Korn/Ferry International (NYSE:KFY), LogMeIn Inc (NASDAQ:LOGM), Gannett Co., Inc. (NYSE:GCI), and Mueller Industries, Inc. (NYSE:MLI). This group of stocks’ market values resemble TSRA’s market value.

As you can see these stocks had an average of 20 hedge funds with bullish positions and the average amount invested in these stocks was $202 million, below the $378 million figure in TSRA’s case. Korn/Ferry International (NYSE:KFY) is the most popular stock in this table with 23 funds holding shares, while Mueller Industries, Inc. (NYSE:MLI) is the least popular one. Compared to these stocks, Tessera Technologies, Inc. (NASDAQ:TSRA) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.