What Gives Resilience to ACI Worldwide (ACIW) in the Down Market?

The London Company, an investment management company, released “The London Company Small Cap Strategy” first quarter 2025 investor letter. A copy of the letter can be downloaded here. U.S. equities experienced a correction in 1Q25 due to macro risks, weak economic growth, and inflation. The fund declined 6.9% (-7.1%, net) compared to a 9.5% decrease in the Russell 2000 Index. The positive impact of stock selection contributed to the strategy’s relative performance in the quarter, partially offset by sector exposure. For more information on the fund’s top picks in 2025, please check its top five holdings.

In its first-quarter 2025 investor letter, The London Company Small Cap Strategy highlighted stocks such as ACI Worldwide, Inc. (NASDAQ:ACIW). ACI Worldwide, Inc. (NASDAQ:ACIW) is a software company that develops, installs, and supports a wide range of software products and solutions to facilitate digital payments. The one-month return of ACI Worldwide, Inc. (NASDAQ:ACIW) was -6.63%, and its shares gained 33.37% of their value over the last 52 weeks. On May 12, 2025, ACI Worldwide, Inc. (NASDAQ:ACIW) stock closed at $48.76 per share with a market capitalization of $5.115 billion.

The London Company Small Cap Strategy stated the following regarding ACI Worldwide, Inc. (NASDAQ:ACIW) in its Q1 2025 investor letter:

“ACI Worldwide, Inc. (NASDAQ:ACIW) – ACIW yielded resiliency in a down market. The business is quite stable, with a high rate of recurring revenues and -12-month visibility on revenues due to the backlog. The organic growth rate of the company continues to persist at structurally higher rates. ACIW is a cash generative business that has recently seen improved cash conversion and subsequently we have benefitted from increased shareholder returns.”

ACI Worldwide, Inc. (NASDAQ:ACIW) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 35 hedge fund portfolios held ACI Worldwide, Inc. (NASDAQ:ACIW) at the end of the fourth quarter which was 31 in the previous quarter. While we acknowledge the potential of ACI Worldwide, Inc. (NASDAQ:ACIW) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

In another article, we covered ACI Worldwide, Inc. (NASDAQ:ACIW) and shared the list of most promising technology stocks to buy. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors.

READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.

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