Investing in hedge funds can bring large profits, but it’s not for everybody, since hedge funds are available only for high-net-worth individuals. They generate significant returns for investors to justify their large fees and they allocate a lot of time and employ complex analysis to determine the best stocks to invest in. A particularly interesting group of stocks that hedge funds like is small-caps. The huge amount of capital does not allow hedge funds to invest a lot in small-caps, but our research showed that their most popular small-cap ideas are less efficiently priced and generate stronger returns than their large- and mega-cap picks and the broader market. That is why we follow the hedge fund activity in the small-cap space.
Is ACI Worldwide Inc (NASDAQ:ACIW) a buy, sell, or hold? Prominent investors are taking a bullish view. The number of long hedge fund bets advanced by four recently. ACI Worldwide Inc (NASDAQ:ACIW) was in 18 hedge funds’ portfolios at the end of September. There were 14 hedge funds in our database with ACI Worldwide Inc (NASDAQ:ACIW) positions at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as EnerSys (NYSE:ENS), Tupperware Brands Corporation (NYSE:TUP), and Cimpress NV (NASDAQ:CMPR) to gather more data points.
According to most shareholders, hedge funds are seen as unimportant, old investment tools of the past. While there are greater than 8,000 funds with their doors open at present, our researchers look at the masters of this group, around 700 funds. Most estimates calculate that this group of people shepherd the majority of all hedge funds’ total capital, and by keeping an eye on their first-class investments, Insider Monkey has uncovered several investment strategies that have historically surpassed the market. Insider Monkey’s small-cap hedge fund strategy defeated the S&P 500 index by 12 percentage points per annum for a decade in their back tests.
Now, let’s take a gander at the latest action encompassing ACI Worldwide Inc (NASDAQ:ACIW).
Hedge fund activity in ACI Worldwide Inc (NASDAQ:ACIW)
At the end of the third quarter, a total of 18 of the hedge funds tracked by Insider Monkey were long in this stock, an increase of 29% from the second quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were upping their stakes significantly (or already accumulated large positions).
According to publicly available holdings data compiled by Insider Monkey, Amy Minella’s Cardinal Capital has the number one position in ACI Worldwide Inc (NASDAQ:ACIW), worth close to $42.6 million, comprising 2.7% of its total 13F portfolio. Coming in second is P2 Capital Partners, led by Claus Moller, holding a $23.3 million position; 4.5% of its 13F portfolio is allocated to the stock. Some other peers with similar optimism consist of Chuck Royce’s mutual fund, Royce & Associates, Gregg J. Powers’ Private Capital Management, and Wallace Weitz’s Wallace R. Weitz & Co..
Now, specific money managers have jumped into ACI Worldwide Inc (NASDAQ:ACIW) headfirst. SG Capital Management, managed by Ken Grossman and Glen Schneider, assembled the most valuable position in ACI Worldwide Inc (NASDAQ:ACIW). SG Capital Management had $7.2 million invested in the company at the end of the quarter. Renaissance Technologies also made a $5.8 million investment in the stock during the quarter. The following funds were also among the new ACI investors: Israel Englander’s Millennium Management, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, and Neil Chriss’ Hutchin Hill Capital.
Let’s now take a look at hedge fund activity in other stocks similar to ACI Worldwide Inc (NASDAQ:ACIW). We will take a look at EnerSys (NYSE:ENS), Tupperware Brands Corporation (NYSE:TUP), Cimpress NV (NASDAQ:CMPR), and Cathay General Bancorp (NASDAQ:CATY). This group of stocks’ market values are similar to ACI Worldwide Inc (NASDAQ:ACIW)’s market value.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see these stocks had an average of 14 hedge funds with bullish positions and the average amount invested in these stocks was $241 million. That figure was $132 million in ACI Worldwide Inc (NASDAQ:ACIW)’s case. Tupperware Brands Corporation (NYSE:TUP) is the most popular stock in this table. On the other hand, EnerSys (NYSE:ENS) is the least popular one with only 12 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard Tupperware Brands Corporation (NYSE:TUP) might be a better candidate to consider a long position in.