Oakmark Funds, advised by Harris Associates, released its “Oakmark Select Fund” second quarter 2024 investor letter. A copy of the letter can be downloaded here. The fund returned -6.19% in the second quarter compared to a 4.28% return for the S&P 500 Index. The fund returned 11.56% since its inception compared to the index’s return of 9.69% over the same period. The largest contributing sector was communication services while industrials and health care were the leading detractors. In addition, you can check the top 5 holdings of the fund to know its best picks in 2024.
Oakmark Select Fund highlighted stocks like Paycom Software, Inc. (NYSE:PAYC) in the Q2 2024 investor letter. Headquartered in Oklahoma City, Oklahoma, Paycom Software, Inc. (NYSE:PAYC) is a cloud-based human capital management solution provider. The one-month return of Paycom Software, Inc. (NYSE:PAYC) was 1.19%, and its shares lost 59.30% of their value over the last 52 weeks. On July 11, 2024, Paycom Software, Inc. (NYSE:PAYC) stock closed at $144.48 per share with a market capitalization of $8.396 billion.
Oakmark Select Fund stated the following regarding Paycom Software, Inc. (NYSE:PAYC) in its Q2 2024 investor letter:
“Paycom Software, Inc. (NYSE:PAYC) was the top detractor during the quarter. The U.S.-based payroll software company’s stock underperformed following the release of mixed first quarter results and the resignation of Co CEO Chris Thomas. We believe Paycom’s softer than expected results are largely attributable to a weak macro environment for payroll software and that Paycom is taking the right steps to improve operational performance, which should enable a return to healthy revenue growth when the market improves. And although the Co-CEO’s resignation was a negative surprise, we spoke with founder and CEO Chad Richison following the announcement and, following the conversation, remain confident in the company’s long-term prospects. At the current price, Paycom trades for 4x revenue which we believe is too cheap for highly profitable, growing software business.”
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 31 Most Popular Stocks Among Hedge Funds. As per our database, 35 hedge fund portfolios held Paycom Software, Inc. (NYSE:PAYC) at the end of the first quarter which was 40 in the previous quarter. The first quarter revenue of Paycom Software, Inc. (NYSE:PAYC) was $500 million, up 11% compared to Q1 2023. While we acknowledge the potential of Paycom Software, Inc. (NYSE:PAYC) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
We discussed Paycom Software, Inc. (NYSE:PAYC) in another article and shared Polen Focus Growth Strategy’s views on the company in the previous quarter. In addition, please check out our hedge fund investor letters Q2 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.
