Is WEX (WEX) a Good Long-Term Investment?

Ariel Investments, an investment management company, released its “Ariel Small Cap Value Strategy” second-quarter 2025 investor letter. A copy of the letter can be downloaded here. The second quarter witnessed extreme volatility. Stocks declined sharply after the “Liberation Day” tariff announcement and staged a remarkable recovery as the administration initiated a 90-day pause. In the quarter, Ariel Small Cap Value Tax-Exempt Composite appreciated +7.72% gross of fees (+7.58% net of fees) against this backdrop, compared to +4.97% and +8.50% returns of the Russell 2000 Value Index and the Russell 2000 Index, respectively. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.

In its second-quarter 2025 investor letter, the Ariel Small Cap Value Strategy highlighted stocks such as WEX Inc. (NYSE:WEX). WEX Inc. (NYSE:WEX) is a commerce platform operator that offers payment processing and information management solutions. The one-month return of WEX Inc. (NYSE:WEX) was -3.42%, and its shares lost 8.60% of their value over the last 52 weeks. On August 21, 2025, WEX Inc. (NYSE:WEX) stock closed at $169.61 per share, with a market capitalization of $5.812 billion.

Ariel Small Cap Value Strategy stated the following regarding WEX Inc. (NYSE:WEX) in its second quarter 2025 investor letter:

WEX Inc. (NYSE:WEX), a niche payment solutions provider for the fleet, travel and healthcare benefits industries, declined in the quarter. Although earnings were in-line with consensus expectations, management lowered full year guidance due to headwinds from fuel prices, interest rates and foreign exchange. Nonetheless, share repurchases demonstrate management’s confidence in the long-term momentum of the business. Looking ahead, we view WEX as a market leader in attractive, recurring and high margin niches, poised to benefit from growing payments outsourcing over the long-term.”

An executive standing in front of a large monitor that shows payment processing information.

WEX Inc. (NYSE:WEX) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 36 hedge fund portfolios held WEX Inc. (NYSE:WEX) at the end of the second quarter, which was 44 in the previous quarter. WEX Inc. (NYSE:WEX) reported revenue of 659.6 million in the second quarter of 2025, representing a decrease of 2.1% year-over-year. While we acknowledge the risk and potential of WEX Inc. (NYSE:WEX) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than WEX Inc. (NYSE:WEX) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered WEX Inc. (NYSE:WEX) and shared Gator Capital Management’s views on the company. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.