Brown Capital Management, an investment management company, released its “The Brown Capital Management Small Company Fund” fourth quarter 2023 investor letter. A copy of the same can be downloaded here. The Small Company Fund returned 8.74%, underperforming the Russell 2000 Growth index’s 12.75% return. The fund returned 19.12% for the calendar year 2023 underperforming 18.66% return for the benchmark. In addition, check the fund’s top five holdings to know its best picks in 2023.
The Brown Capital Management Small Company Fund featured stocks like Paycom Software, Inc. (NYSE:PAYC) in the Q4 2023 investor letter. Headquartered in Oklahoma City, Oklahoma, Paycom Software, Inc. (NYSE:PAYC) is a cloud-based human capital management solution provider. On March 6, 2024, Paycom Software, Inc. (NYSE:PAYC) stock closed at $175.88 per share. One-month return of Paycom Software, Inc. (NYSE:PAYC) was -10.15%, and its shares lost 38.45% of their value over the last 52 weeks. Paycom Software, Inc. (NYSE:PAYC) has a market capitalization of $9.947 billion.
The Brown Capital Management Small Company Fund stated the following regarding Paycom Software, Inc. (NYSE:PAYC) in its fourth quarter 2023 investor letter:
“Paycom Software, Inc. (NYSE:PAYC) makes cloud-based human capital management software. Paycom’s product suite helps companies handle payroll, time and attendance, benefits, talent acquisition, performance management and compensation budgeting. Paycom provides a user-friendly solution across all functions in a single platform, enabling employees to easily update information themselves. Paycom is differentiated from competitors who often provide narrow point solutions, which then require customers to integrate data across multiple systems, resulting in duplicative, outdated or inaccurate information. Paycom is adding to the functionality of its platform, which is attracting larger clients and expanding the company’s market opportunity.
During the quarter, Paycom underperformed as its third quarter results included lower-than-expected 2024 revenue guidance. We believe much of the revenue deceleration is due to management’s decision to drive greater adoption of Paycom’s new employee-driven payroll software called BETI, rather than cross-selling other products. Management believes greater client-employee usage of the BETI software should drive greater client retention and ease the adoption of new products scheduled for release over the next two to three years. We think that the revenue slowdown should be temporary, and that Paycom remains on solid footing, with a strong balance sheet, profitability and innovation that is advancing the company’s competitive position longer term. We added to our position during the quarter.”
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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 discussed Paycom Software, Inc. (NYSE:PAYC) in another article and shared Polen Capital’s views on the company. In addition, please check out our hedge fund investor letters Q4 2023 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.
