In this article, we discuss the 5 back-to-work stocks to buy now. If you want to read our detailed analysis of these stocks, go directly to the 10 Back-to-Work Stocks to Buy Now.
5. Paycom Software, Inc. (NYSE:PAYC)
Number of Hedge Fund Holders: 40
Paycom Software, Inc. (NYSE:PAYC) provides human capital management solutions. Labor shortages have caused havoc for many companies in the past few months and Paycom stock has gained as more firms turn to it for solutions.
Needham analyst Ryan MacDonald recently raised the price target on Paycom Software, Inc. (NYSE:PAYC) stock to $640 from $495 and kept a Buy rating on the shares, appreciating the earnings beat of the firm in the third quarter.
At the end of the third quarter of 2021, 40 hedge funds in the database of Insider Monkey held stakes worth $1.4 billion in Paycom Software, Inc. (NYSE:PAYC).
In its Q4 2020 investor letter, Polen Capital, an asset management firm, highlighted a few stocks and Paycom Software, Inc. (NYSE:PAYC) was one of them. Here is what the fund said:
“Paycom is a cloud-based SaaS provider for human capital management. Its simple yet innovative single-instance software initially targeted small and mid-size businesses, and it is being adopted widely. The company has a highly repeatable sales process driven by more than 90% customer retention and a solid track record for selling more to existing customers while acquiring new users. We also like Paycom’s founder/CEO and his impressive track record for value-creating reinvestment. Despite the challenges created by the pandemic, revenue grew 14% in the fourth quarter and for 2020. Additionally, we believe Paycom is well-positioned to benefit from digital transformation as more corporate functions move to the cloud.”
4. HubSpot, Inc. (NYSE:HUBS)
Number of Hedge Fund Holders: 48
HubSpot, Inc. (NYSE:HUBS) owns and operates a cloud-based customer relationship management platform. The stock has gained in the past few days after reports that tech giant Amazon is interested in buying out the firm. The firm is also likely to receive an influx of new orders as offices reopen and business resumes in the post-pandemic economy.
HubSpot, Inc. (NYSE:HUBS) recently posted earnings for the third quarter, reporting earnings per share of $0.54, beating estimates by $0.10. The revenue over the period was $339 million, beating estimates by $12.6 million.
Among the hedge funds being tracked by Insider Monkey, California-based investment firm SCGE Management is a leading shareholder in HubSpot, Inc. (NYSE:HUBS) with 1.4 million shares worth more than $951 million.
In its Q2 2021 investor letter, Artisan Partners, an asset management firm, highlighted a few stocks and HubSpot, Inc. (NYSE:HUBS) was one of them. Here is what the fund said:
“HubSpot has its roots in marketing automation software for small and medium-sized businesses, but during our ownership period has steadily expanded its offering to become a broad front-office solution suite across marketing, sales, service, website content management and customer data analytics (and has simultaneously enriched these tools to attract larger customers). The pandemic has prompted companies across the globe to modernize their customer-facing software at a record pace as they increasingly rely on their digital capabilities. HubSpot’s ability to meet this need was on full display in its recent earnings results. New customer additions hit a record pace (+45% YoY), and the company demonstrated both high retention of existing customers and strong progress in driving higher adoption of additional software modules. Furthermore, the company’s sales and marketing spend is getting more efficient, which is driving a steady increase in margins. Given the positive profit cycle momentum, we added to our position at a valuation we consider attractive.”
3. Kansas City Southern (NYSE:KSU)
Number of Hedge Fund Holders: 59
Kansas City Southern (NYSE:KSU) is a transportation holding company. The reopening of offices will help the firm as people use buses, trains, and other forms of transport to commute to and back from work everyday, giving transport stocks a major boost after months of lockdown.
Kansas City Southern (NYSE:KSU) has a market cap of $26 billion and posted $2.6 billion in revenue last year. The company was founded in 1887 and is headquartered in Missouri. It employs over 6,500 people.
At the end of the third quarter of 2021, 59 hedge funds in the database of Insider Monkey held stakes worth $4.3 billion in Kansas City Southern (NYSE:KSU).
In its Q1 2021 investor letter, Miller/Howard Investments, an asset management firm, highlighted a few stocks and Kansas City Southern (NYSE:KSU) was one of them. Here is what the fund said:
“Canadian Pacific Railway (CP) agreed to acquire Kansas City Southern (KSU) in the largest rail deal in over a decade. The merger will create the first rail network connecting Canada, the US, and Mexico, and it should benefit from the passage of the USMCA Trade Agreement. We initiated a position in KSU in Q4 as we expected it to benefit from growing North American trade and viewed it as a consolidation candidate.”
2. Workday, Inc. (NASDAQ:WDAY)
Number of Hedge Fund Holders: 72
Workday, Inc. (NASDAQ:WDAY) markets enterprise cloud applications. One of the most popular products of the firm is financial management software. As business resumes, banks and tech companies could turn to the company for solutions to manage higher traffic at their branches.
Needham analyst Scott Berg recently kept a Buy rating on Workday, Inc. (NASDAQ:WDAY) stock and raised the price target to $360 from $310, underlining that the third quarter earnings of the firm were “very good”.
At the end of the third quarter of 2021, 72 hedge funds in the database of Insider Monkey held stakes worth $6.3 billion in Workday, Inc. (NASDAQ: WDAY), the same as in the previous quarter worth $5.1 billion.
In its Q1 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Workday, Inc. (NASDAQ:WDAY) was one of them. Here is what the fund said:
“In addition to the new issue market, we have been tactically adding growth exposure. We took advantage of the selloff in disruptors that comprise a large portion of the portfolio to initiate a position in enterprise software maker Workday.”
1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 250
Microsoft Corporation (NASDAQ:MSFT) is a technology firm with core interests in the software business. As normal service with regards to workplaces resumes again, enterprise spending on Microsoft products will likely increase, benefiting the stock in the near-term.
On November 1, investment advisory Deutsche Bank initiated coverage of Microsoft Corporation (NASDAQ:MSFT) stock with a Buy rating and a price target of $390. Analyst Brad Zelnick issued the ratings update.
At the end of the third quarter of 2021, 250 hedge funds in the database of Insider Monkey held stakes worth $6.5 billion in Microsoft Corporation (NASDAQ:MSFT), up from 238 in the preceding quarter worth $6.2 billion.
In its Q1 2021 investor letter, Polen Capital, an investment management firm, highlighted a few stocks and Microsoft Corporation (NASDAQ:MSFT) was one of them. Here is what the fund said:
“We have written extensively about Microsoft in recent commentaries. It was our leading contributor last year and one of our largest weightings within the Portfolio. It continues to experience business momentum through several dominant, essential, and competitively advantaged businesses, like Office 365 and Azure. The markets it competes for are enormous, which gives the company the ability to compound at scale. In the past quarter alone, the company generated over $40 billion in revenue, representing a 17% growth rate. The inherent operating leverage in Microsoft’s business model continues and led to 34% earnings growth this past quarter. Despite the broad rotation we saw in the first quarter and Microsoft’s robust performance in 2020, we think its business fundamentals continue to exhibit strength, and the stock continues to reflect the fundamentals.”
You can also take a peek at Stanley Druckenmiller is Loading Up on These 15 Stocks and 10 Stocks to Buy and Hold for Long Term According to Warren Buffett.
