On September 19, 2023, Eeva Hakoranta, the Chief Licensing Officer of InterDigital Inc (IDCC, Financial), sold 2,550 shares of the company. This move is part of a larger trend, as over the past year, the insider has sold a total of 4,453 shares and purchased none.
Eeva Hakoranta is a key figure at InterDigital Inc, a company that designs and develops technologies that enable and enhance wireless communications. The company's business model is to invent, and then license, these technologies to providers who manufacture and sell digital cellular and wireless products and services. Hakoranta, as the Chief Licensing Officer, plays a crucial role in the company's operations and strategic decisions.
The insider's recent sell has raised some eyebrows, especially considering the overall insider transaction history of InterDigital Inc. Over the past year, there has been only one insider buy compared to 13 insider sells. This could potentially signal a lack of confidence in the company's future performance.
However, it's important to consider the company's valuation and stock price in this context. On the day of the insider's recent sell, shares of InterDigital Inc were trading for $82.11, giving the company a market cap of $2.117 billion. The price-earnings ratio was 13.15, lower than both the industry median of 16.1 and the company’s historical median price-earnings ratio.
Furthermore, with a price of $82.11 and a GuruFocus Value of $92.51, InterDigital Inc has a price-to-GF-Value ratio of 0.89. This suggests that the stock is modestly undervalued based on its GF Value.
The GF Value is an intrinsic value estimate developed by GuruFocus, calculated based on historical multiples, a GuruFocus adjustment factor, and future estimates of business performance from Morningstar analysts. In the case of InterDigital Inc, these factors suggest that the stock may be undervalued, despite the recent insider sell.
In conclusion, while the insider's recent sell may raise some concerns, the company's valuation and stock price suggest that InterDigital Inc may still be a good investment. As always, potential investors should conduct their own research and consider multiple factors before making a decision.
