This is a rebroadcast of OICs webinar panel. In this deep dive discussion, Frank Fahey (representing...
Options Play on ACI Worldwide
04/24/2017 2:45 am EST
Based in Naples, Florida, ACI is a leading global provider of real-time electronic payment and banking solutions. ACI executives provide expertise in instant payment systems, cash management, bill paying and fraud prevention.
The company is expanding rapidly. Revenues hit $1 billion for the first time, while rising 11% in one year. Earnings jumped 52% to $129 million in the past year.
Profit margins are expanding to 13%, and return on equity (ROE) is over 18%. The company has $76 million in cash, which is plenty to cover the $101 million in long-term debt.
Last week, ACI announced that it has expanded its relationship with Alipay, China's largest mobile payment provider operated by Ant Financial Services Group, to enable merchants across Europe, the Middle East and Africa to accept Alipay payments from Chinese shoppers.
ACI will report first-quarter earnings on May 4. I expect it to beat estimates again. Last month, Raymond James raised its recommendation to an “outperform,” suggesting the company has more good news to report soon.
Let’s buy ACI Worldwide at market today and set a protective stop of $17 a share. For those willing to take greater risks, consider buying the August $22.50 call options, which last traded for $1.05 and expire on Aug. 18.
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