Is ACI Worldwide Inc (NASDAQ:ACIW) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.
ACI Worldwide Inc (NASDAQ:ACIW) was in 28 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 30. ACIW has seen an increase in enthusiasm from smart money recently. There were 26 hedge funds in our database with ACIW positions at the end of the second quarter. Our calculations also showed that ACIW isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Now let’s take a look at the latest hedge fund action encompassing ACI Worldwide Inc (NASDAQ:ACIW).
Jeffrey Smith of Starboard Value LP
Do Hedge Funds Think ACIW Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2021, a total of 28 of the hedge funds tracked by Insider Monkey were long this stock, a change of 8% from the second quarter of 2021. On the other hand, there were a total of 29 hedge funds with a bullish position in ACIW a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey’s hedge fund database, Starboard Value LP, managed by Jeffrey Smith, holds the largest position in ACI Worldwide Inc (NASDAQ:ACIW). Starboard Value LP has a $276.2 million position in the stock, comprising 5.1% of its 13F portfolio. Coming in second is Cardinal Capital, managed by Amy Minella, which holds a $100.5 million position; 2.4% of its 13F portfolio is allocated to the company. Other hedge funds and institutional investors with similar optimism include Claus Moller’s P2 Capital Partners, and Cliff Asness’s AQR Capital Management. In terms of the portfolio weights assigned to each position Clearfield Capital allocated the biggest weight to ACI Worldwide Inc (NASDAQ:ACIW), around 27.18% of its 13F portfolio. Clearfield Capital is also relatively very bullish on the stock, dishing out 5.52 percent of its 13F equity portfolio to ACIW.
As aggregate interest increased, key hedge funds were breaking ground themselves. Clearfield Capital, managed by Philip Hilal, established the biggest call position in ACI Worldwide Inc (NASDAQ:ACIW). Clearfield Capital had $33.8 million invested in the company at the end of the quarter. Marc Majzner’s Clearline Capital also initiated a $11.4 million position during the quarter. The other funds with new positions in the stock are Mark Coe’s Intrinsic Edge Capital, Brandon Haley’s Holocene Advisors, and Jinghua Yan’s TwinBeech Capital.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as ACI Worldwide Inc (NASDAQ:ACIW) but similarly valued. These stocks are Brookfield Business Partners L.P. (NYSE:BBU), B2Gold Corp (NYSE:BTG), Haemonetics Corporation (NYSE:HAE), CMC Materials, Inc. (NASDAQ:CCMP), BigCommerce Holdings, Inc. (NASDAQ:BIGC), Xerox Holdings Corporation (NASDAQ:XRX), and Viavi Solutions Inc (NASDAQ:VIAV). This group of stocks’ market values match ACIW’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BBU | 3 | 3988 | -1 |
| BTG | 16 | 176379 | 1 |
| HAE | 29 | 442772 | -1 |
| CCMP | 22 | 191132 | 0 |
| BIGC | 21 | 616202 | 0 |
| XRX | 35 | 987032 | 10 |
| VIAV | 23 | 228421 | -1 |
| Average | 21.3 | 377989 | 1.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 21.3 hedge funds with bullish positions and the average amount invested in these stocks was $378 million. That figure was $571 million in ACIW’s case. Xerox Holdings Corporation (NASDAQ:XRX) is the most popular stock in this table. On the other hand Brookfield Business Partners L.P. (NYSE:BBU) is the least popular one with only 3 bullish hedge fund positions. ACI Worldwide Inc (NASDAQ:ACIW) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for ACIW is 74.1. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 31.1% in 2021 through December 9th and beat the market again by 5.1 percentage points. Unfortunately ACIW wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on ACIW were disappointed as the stock returned 7.1% since the end of September (through 12/9) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
