What Makes InterDigital (IDCC) an Investment Bet?

Investment management company First Pacific Advisors recently released its “FPA Queens Road Small Cap Value Fund” first quarter 2024 investor letter. A copy of the same can be downloaded here. In the first quarter, the fund returned 3.36% compared to a 2.90% return for the Russell 2000 Value Index. Small value and small quality have outperformed over longer periods, although small caps have significantly underperformed over the past ten years. The firm focuses on the high-quality compounders in its portfolio. In addition, you can check the top 5 holdings of the fund to know its best picks in 2024.

FPA Queens Road Small Cap Value Fund highlighted stocks like InterDigital, Inc. (NASDAQ:IDCC) in the first quarter 2024 investor letter. InterDigital, Inc. (NASDAQ:IDCC) is a global research and development company that focuses on wireless, visual, artificial intelligence (AI), and related technologies. InterDigital, Inc.'s (NASDAQ:IDCC) one-month return was 8.63%, and its shares gained 32.50% of their value over the last 52 weeks. On June 4, 2024, InterDigital, Inc. (NASDAQ:IDCC) stock closed at $114.90 per share with a market capitalization of $2.9 billion.

FPA Queens Road Small Cap Value Fund stated the following regarding 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."

A technician installing advanced cellular equipment at a 5G cell tower.

InterDigital, Inc. (NASDAQ:IDCC) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 32 hedge fund portfolios held InterDigital, Inc. (NASDAQ:IDCC) at the end of the first quarter which was 24 in the previous quarter. The first quarter revenue of InterDigital, Inc. (NASDAQ:IDCC) was $264 million, up by 30% year-over-year. It was one of the highest in the company’s history. While we acknowledge the potential of InterDigital, Inc. (NASDAQ:IDCC) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

In another article, we discussed InterDigital, Inc. (NASDAQ:IDCC) and shared the list of oversold value stocks to buy. FPA Queens Road Small Cap Value Fund stated about InterDigital, Inc. (NASDAQ:IDCC) in its fourth quarter 2023 investor letter. In addition, please check out our hedge fund investor letters Q1 2024 page for more investor letters from hedge funds and other leading investors.

READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.

Disclosure: None. This article is originally published at Insider Monkey.