InterDigital Inc (NASDAQ:IDCC) Emerges as a Top Growth and Momentum Pick

InterDigital Inc (NASDAQ:IDCC) has appeared as a notable option for investors using systematic growth strategies, found through a screening method that joins Mark Minervini’s Trend Template with high growth momentum standards. This two-part method confirms chosen securities display both solid technical momentum and sound fundamental growth features, forming an effective filter for finding possible market leaders.

Technical Strength and Trend Template Alignment

InterDigital shows notable technical features that match Minervini’s Trend Template needs well. The template focuses on stocks in solid uptrends over various timeframes, and IDCC shows this through its moving average setup and price movement.

Key technical measures confirming Trend Template alignment include:

• Current price ($340.87) trading well above all major moving averages (50-day: $296.39, 150-day: $242.21, 200-day: $230.26)
• All moving averages moving upward, confirming continued momentum
• 50-day moving average located above both 150-day and 200-day averages
• Stock trading 136% above its 52-week low of $144.46
• Current price within 6% of its 52-week high of $361.56
• Notable relative strength ranking of 95.35, doing better than 95% of all stocks

These features are important within Minervini’s structure because they find stocks in set Stage 2 uptrends with solid institutional support and momentum. The high relative strength score shows market leadership, a main part of Minervini’s SEPA method that concentrates on stocks doing better than the wider market.

Fundamental Growth Momentum

Beyond technical strength, InterDigital shows notable fundamental growth measures that meet high growth momentum standards. The company’s financial performance shows speeding growth over several areas.

Earnings growth highlights:

• TTM EPS of $14.03 showing 41.1% year-over-year growth
• Quarterly EPS growth of 36.1% compared to same quarter previous year
• Three straight years of speeding annual EPS growth (45.8%, 66.2%, 114.9%, 60.5%)
• Solid earnings surprise history with 3 beats in last 4 quarters averaging 116.8% above estimates

Revenue and profitability increase:

• TTM revenue growth of 21.8% year-over-year
• Quarterly revenue growth of 34.5% compared to same quarter previous year
• Notable profit margin increase to 60.1% in most recent quarter
• Significant analyst optimism with next-year EPS estimates changed upward by 43% over past three months

These fundamental measures match Minervini’s focus on companies showing “big earnings” that “attract big attention” from institutional investors. The mix of solid earnings growth, margin increase, and positive estimate changes forms the fundamental catalyst Minervini finds as needed for continued price gains.

Technical Analysis Overview

The technical analysis report for InterDigital shows notable strength with a complete technical rating of 10/10 and a solid setup rating of 8/10. The stock shows steady performance across both short and long-term timeframes while showing constant better performance relative to the overall market.

Key technical observations include:

• Both short-term and long-term trends rated as positive
• Stock trading in upper part of its 52-week range
• Several support zones found between $337.07 and $339.09
• Limited resistance above current price levels
• Recent consolidation shape showing possible entry chance

The technical setup indicates a possible trading range with entry above $356.12 and stop loss below $337.06, showing managed risk factors for position sizing. For full technical analysis, readers can see the complete technical report.

Investment Considerations

InterDigital’s place as a research and development company concentrating on wireless, video, and AI technologies puts it in increasing market areas. The company’s licensing business model creates solid cash flows, with free cash flow per share of $10.63 showing 23.4% year-over-year growth. This fundamental strength joined with technical momentum forms a notable case for growth-focused investors.

The stock’s current consolidation inside its set uptrend, joined with solid fundamental growth and limited overhead resistance, shows what Minervini would describe as a possible “volatility contraction pattern” – a setup that often comes before notable price moves.

For investors looking for similar options that meet both Trend Template and high growth momentum standards, more screening results are available through the High Growth Momentum + Trend Template screen.

Disclaimer: This analysis is for informational and educational purposes only and should not be taken as investment advice. The information shown does not form a suggestion to buy, sell, or hold any security. Investors should do their own research and talk with a qualified financial advisor before making investment decisions. Past performance is not a sign of future results.