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Bristlemoon Capital, a global equities firm, released its “Bristlemoon Global Fund” first-quarter 2026 investor letter. The Bristlemoon Global Fund returned -25.5 percent in the March 2026 quarter, with a -3.4 percent return for March 2026, net of fees. A copy of the letter is available to download here. This was the Fund's most severe drawdown since inception, caused not by declining earnings, but by sharp and rapid repricing by investors. The letter outlined the weak performance, how the firm addressed it with a compounding/conviction position sizing framework, and adjustments following the Iran War developments. The first quarter of 2026 saw a sharp sell-off in software companies, mostly due to fears that AI would impact SaaS companies. During this dislocation, the firm increased its holdings of high-quality assets at lower prices. Long-term earnings growth remains key, and the firm believes its positions are well-placed to compound earnings attractively over time. In addition, please check the Fund’s top five holdings to know its best picks in 2026.
In its first-quarter 2026 investor letter, Bristlemoon Global Fund highlighted stocks such as Fair Isaac Corporation (NYSE:FICO). Fair Isaac Corporation (NYSE:FICO) is a technology company that develops analytic, software, and digital decision-making technologies and services. The one-month return of Fair Isaac Corporation (NYSE:FICO) was -2.36%, and its shares lost 49.10% of their value over the last 52 weeks. On May 5, 2026, Fair Isaac Corporation (NYSE:FICO) stock closed at $1,066.27 per share, with a market capitalization of $24.73 billion.
Bristlemoon Global Fund stated the following regarding Fair Isaac Corporation (NYSE:FICO) in its Q1 2026 investor letter:
"Many of the Fund’s holdings suffered multiple compression during the quarter, despite a number of these businesses reporting phenomenal earnings results. For example, Fair Isaac Corporation (NYSE:FICO) reported a solid Q4 2025 result with, in our view, a highly conservative earnings guidance for fiscal year 2026. Earnings expectations for the business have continued to creep up, yet the share price declined by almost -37% in the March quarter. FICO’s FY27 earnings multiple derated from above 50x at the start of the year, to 25x at the end of March, a more than 50% decline in the multiple over the span of a quarter.
FICO’s multiple is now more than one standard deviation below its 10 year average, and the P/E ratio has declined to a level that has historically only been reached during periods of heightened pessimism. Notably, when FICO’s multiple reaches these depressed levels, it has historically staged a sharp rebound back through the long-term average multiple when the narrative improves. There is 50% upside alone in FICO returning to its long-term average multiple…” (Click here to read the full text)
Fair Isaac Corporation (NYSE:FICO) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 81 hedge fund portfolios held Fair Isaac Corporation (NYSE:FICO) at the end of the fourth quarter, up from 72 in the previous quarter. Fair Isaac Corporation (NYSE:FICO) announced second-quarter fiscal 2026 revenue of $692 million, reflecting a 39% year-over-year growth. While we acknowledge the potential of Fair Isaac Corporation (NYSE:FICO) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
In another article, we covered Fair Isaac Corporation (NYSE:FICO) and shared the list of best dip stocks to invest in according to billionaires. In addition, please check out our hedge fund investor letters Q1 2026 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.