Techies input vs dot connectors
Techies and legal eagles are the ones that help me manage my investment. They can give me insight into the need for IDCC IP and their ability to monetize it. I am no expert on institutions, but I do believe that if IDCC signs additional contracts and expands revenue, institutions and others will bid the price up. If IDCC does not execute, demand and price will languish. Institutions are not stupid, but they also are not omniscient. They look at the same things individuals do, revenue, earnings, potential for future growth, growth rates, risks and possible reward. They do have massive resources and great experience, but they also follow thousands of stocks, which means they don't put all their energy into every stock they follow.
I would much rather know what contracts will be signed over the next 6 months than which way the institutions are leaning. Institutional desires will move the stock short term, but as a long term investor I don't worry about the price moves not caused by news. IDCCs price had an expectation of news built in. Current revenues do not support the current price. However I am still optimistic that additional contracts will be signed and the fundamentals will support a multiple of the current price. I believe price and value converge over time, so if the institutions are bearish on the stock when fundamentals and future earnings are bright, I will hold or buy more. Institutions pretty much ignored the stock in the single digits and teens. The stepped in in the 20s and bought big time in the 30s.
My exit strategy is to sell when Smith Barney and Merrill Lynch both have buys on IDCC. That will indicate that all the buyers are in and it will be time for me to get out. Here's a strategy, buy stocks ignored by institutions that have good prospects for posting solid financial success, then sell when the institutions all are covering it. I realize the first part of that strategy is very tough to do, but I think it would be far easier than reading tea leaves to figure out what institutions next move will be and then trying to trade with them.
