tiprankstipranks
Activist Investor Starboard Ramps Up ACI Stake To 9%; Shares Rise
Market News

Activist Investor Starboard Ramps Up ACI Stake To 9%; Shares Rise

Activist investor Starboard Value ramped up its stake in ACI Worldwide to 9% sending shares in the payment systems software provider up about 2%.

According to an SEC filing, Starboard Value built up its position in ACI (ACIW) from a 1.77% stake as of the end of the second quarter and now owns 10.5 million shares. ACI’s products facilitate electronic payments in real time for banks, merchants, corporations, and third-party payment processors. The company’s product line includes software used in ATM machines, merchant point-of-sale terminals, and mobile devices including smartphones and tablets.

Starboard Value disclosed that it bought the shares based on the “belief that the shares, when purchased, were undervalued and represented an attractive investment opportunity.” The US hedge fund manager also holds positions in Corteva and ON Semiconductor.

Shares in ACI are down 17% this year, while the stock scores a Strong Buy consensus based on 5 Buys vs. only 1 Hold. That’s with an average $35.83 analyst price target implying 12% upside potential lies ahead.

BTIG analyst Mark Palmer last month maintained a Buy rating on the shares saying that “ACIW is an overlooked and underfollowed electronic payment software stock”. At the same time, Palmer lowered his price target to $34 from $37 after the company provided an outlook for 3Q20 revenues and adjusted EBITDA, which was well below consensus estimates and Palmer’s estimates.

“While we shared in the market’s surprise at the extent of the anticipated decline in new license revenue reflected in management’s outlook, we also believe our bullish thesis on the stock remains intact,” Palmer wrote in a note to investors. “The outlook for the most interesting aspects of ACIW’s story – the growth opportunities associated with real-time payments and e-commerce – is more compelling than ever given the changes wrought by the pandemic.” (See ACIW stock analysis on TipRanks)

“We view ACIW as offering a means through which investors can play the pandemic driven acceleration of the adoption of digital payments at a reasonable valuation,” the analyst summed up.

Related News:
ConocoPhillips Snaps Up Rival Concho in $9.7B Deal; Shares Advance
AMC Spikes 14% As Movie Theatres To Reopen; Street Sees 70% Upside
Ally Financial Tops 3Q Estimates; Street Remains Bullish

Trending

Name
Price
Price Change
S&P 500
Dow Jones
Nasdaq 100
Bitcoin

Popular Articles