2. Ceridian HCM Holding Inc. (NYSE:CDAY)
Select Equity Group’s Stake Value: $1,197,801,000
Percentage of Select Equity Group’s 13F Portfolio: 4.02%
Number of Hedge Fund Holders: 20
Ceridian HCM Holding Inc. (NYSE:CDAY), an American company offering SaaS human resources solutions, is one of the top tech stocks to buy according to Select Equity Group, with the hedge fund owning 10.6 million shares of the company, worth $1.19 billion, representing 4.02% of the total Q3 investments.
On December 6, Ceridian HCM Holding Inc. (NYSE:CDAY) announced that it has acquired ADAM HCM, a Mexico-based payroll and HCM company, that provides HR solutions in 33 countries. Via this acquisition, Ceridian HCM Holding Inc. (NYSE:CDAY) will become the leading provider of HCM solutions in Latin America, as well as tapping into new potential markets like Mexico and Brazil.
In its third quarter earnings report published on November 3, Ceridian HCM Holding Inc. (NYSE:CDAY) posted an EPS of $0.05, beating estimates by $0.01. Revenue over the period jumped 25.83% year-over-year to $257.20 million, exceeding estimates by $3.04 million.
Wells Fargo analyst Michael Turrin downgraded Ceridian HCM Holding Inc. (NYSE:CDAY) to Equal Weight from Overweight with a price target of $100, down from $135 on January 6.
A total of 20 hedge funds were bullish on Ceridian HCM Holding Inc. (NYSE:CDAY) at the end of September 2021, down from 25 funds in the preceding quarter. Greg Poole’s Echo Street Capital Management is one of the largest stakeholders of Ceridian HCM Holding Inc. (NYSE:CDAY), with 1.55 million shares worth $174.5 million.
Here is what Artisan Mid-Cap Fund has to say about Ceridian HCM Holding Inc. (NYSE:CDAY) in its Q3 2021 investor letter:
“Ceridian is a cloud-based provider of payroll and related software. We began our investment campaign in early 2019 as we believed the company’s transition to a recurring revenue model via its Dayforce suite—which combines HR, payroll, benefits, workforce management and talent management into a single cloud application—would increase uptake for its products. We believed this would not only translate into margin expansion, but also enable the company to capture market share from larger legacy incumbents whose software is less nimble and more limited in functionality and operability. In Q2, Ceridian reported that Dayforce recurring revenue growth reaccelerated to 30% year-over-year and highlighted impressive new customer wins. In addition, the company has a building sales pipeline and is seeing early adoption for its Dayforce Wallet solution, which delivers on-demand digital payroll outside of traditional pay periods. We continue to believe Dayforce is an attractive modern cloud platform that has substantial runway to capture market share from legacy payroll incumbents, and Ceridian’s investments in its sales force and geographic expansion will help it capture this growth potential. Given our high level of conviction, we increased our position size and brought the stock into the CropSM.”
