Polen Capital, an investment management company, released its “Polen Focus Growth Strategy” first quarter 2024 investor letter. A copy of the same can be downloaded here. The US stock market started 2024 optimistically. In the first quarter, the fund returned 8.29% (gross) and 8.09% (net) compared to 11.41% for the Russell 1000 Growth Index and 10.56% for the S&P 500 Index. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Polen Focus Growth Strategy featured stocks like Paycom Software, Inc. (NYSE:PAYC) in the Q1 2024 investor letter. Headquartered in Oklahoma City, Oklahoma, Paycom Software, Inc. (NYSE:PAYC) is a cloud-based human capital management solution provider. On April 18, 2024, Paycom Software, Inc. (NYSE:PAYC) stock closed at $184.87 per share. One-month return of Paycom Software, Inc. (NYSE:PAYC) was -3.14%, and its shares lost 37.91% of their value over the last 52 weeks. Paycom Software, Inc. (NYSE:PAYC) has a market capitalization of $10.865 billion.
Polen Focus Growth Strategy stated the following regarding Paycom Software, Inc. (NYSE:PAYC) in its first quarter 2024 investor letter:
“We purchased a new position inPaycom Software, Inc. (NYSE:PAYC), a payroll and human capital management (HCM) software company. Paycom manages payroll for over 20,000 companies that employ approximately 7 million people. It focuses on mid-market customers and holds a top-three position as a payroll provider for firms with less than 10,000 employees, behind ADP but roughly equal to UKG based on employee penetration. The company has high recurring revenue, above 90%, and has been adept at cross[1]selling HCM software to its payroll customers for years. The company has organically built a cloud-native platform where each HCM offering is tightly integrated, not a patchwork of built and bought offerings like most of its peers.
Revenue growth exceeded 20% for years before a self-inflicted wound last year caused a slowdown in cross-selling. In short, Paycom asked its customer relations representatives to pivot their cross-selling efforts to the newer payroll offering, Beti, which caused significant disruption in the company’s selling motion. Management realized its mistake and is back to its normal cross-selling activity, allowing customers to upgrade to Beti when ready. We expect Paycom to grow its revenues and earnings at a high-teens or better rate over the next five years from a combination of new clients and increasing revenue per client. Both have been equal contributors to revenue growth in the past.”
A close-up of two software engineers typing away at laptops in a modern, well-lit office.
Paycom Software, Inc. (NYSE:PAYC) is not on our list of 30 Most Popular Stocks Among Hedge Funds. At the end of the fourth quarter, Paycom Software, Inc. (NYSE:PAYC) was held by 40 hedge fund portfolios, down from 43 in the previous quarter, according to our database.
We previously discussed Paycom Software, Inc. (NYSE:PAYC) in another article, where we shared Alger Mid Cap Growth Fund’s views on the company. In addition, please check out our hedge fund investor letters Q1 2024 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.
