4. Fair Isaac Corporation (NYSE:FICO)
Valley Forge Capital Management’s Stake Value: $337.5 million
Percentage of Valley Forge Capital Management’s 13F Portfolio: 13.11%
Number of Hedge Fund Holders: 28
Fair Isaac Corporation (NYSE:FICO) is a data analytics company based in San Jose, California, that provides credit scoring services in the United States. Its FICO score, a measure of consumer credit risk, has become a fixture of consumer lending in the country.
On October 8, RBC Capital analyst Ashish Sabadra lowered his price target on Fair Isaac Corporation (NYSE:FICO) to $463 from $550, and kept a Sector Perform rating on the shares of the company. The analyst notes that the company’s valuation looks “attractive” after the stock’s pullback.
According to the second quarter securities filings, Dev Kantesaria’s hedge fund holds 671,509 shares in Fair Isaac Corporation (NYSE:FICO), worth more than $337.5 million.
Gabriel Plotkin of Melvin Capital Management is one of the biggest stakeholders in the company as of the end of the second quarter, according to the data tracked by Insider Monkey.
Overall, 28 funds were bullish on Fair Isaac Corporation (NYSE:FICO) by the end of the June quarter, compared to 27 in the previous quarter.
Richie Capital Group, in its Q3 2021 investor letter, mentioned Fair Isaac Corporation (NYSE:FICO). Here is what the fund had to say:
“Fair Isaac Corp (FICO – down 18.84%) – The stock price for the predictive analytics software firm has declined off of very little news outside of an article in the Wall Street Journal highlighting the increasing competitive threats. We view much of this as known. Anytime a company dominates a market in a monopoly-like manner, it will naturally attract competitors as well as customers who will attempt to push back on pricing. However, their solutions are highly predictive within the subprime market and the company continues to identify new opportunities for their software solutions. FICO reported a solid Q3 in August beating earnings and revenue estimates. The report seemed to imply slowing revenue growth, specifically in their DMS and Applications revenue. We believe the market is missing the bigger picture. FICO is transitioning from a licensing model to a subscription model. These transitions typically lead to near term growth headwinds but longerterm profitability improvement and stickier customers. FICO’s scores revenue continues to grow at a double-digit annual rate, and margins (Gross, Operating, and Net Income) are expanding which supports the premise that the company is maintaining their pricing power. We view this decline as a buying opportunity. Management seems to agree with our thinking as they announced a $500M stock repurchase program on August 18th.”
