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Should You Hold Paycom Software (PAYC) For the Long Term?

Polen Capital, an investment management company, released its “Polen Global Growth Strategy” second-quarter 2024 investor letter. A copy of the letter can be downloaded here. During the second quarter, AI remained the dominant narrative in markets. The Strategy returned -1.63% gross (-1.91% net) compared to the MSCI ACW Index’s 2.87% return. In addition, please check the fund’s top five holdings to know its best picks in 2024.

Polen Global Growth Strategy highlighted stocks like Paycom Software, Inc. (NYSE:PAYC) in the Q2 2024 investor letter. 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 14.67%, and its shares lost 55.48% of their value over the last 52 weeks. On July 26, 2024, Paycom Software, Inc. (NYSE:PAYC) stock closed at $164.03 per share with a market capitalization of $9.532 billion.

Polen Global Growth Strategy stated the following regarding Paycom Software, Inc. (NYSE:PAYC) in its Q2 2024 investor letter:

“Finally, Paycom Software, Inc. (NYSE:PAYC)—a new addition we started at a smaller position size—represented another relative detractor in the period. Paycom is a leading cloud-native payroll and human capital management (HCM) software provider. A recent go-to-market hiccup with their new BETI product and some macro weaknesses have led to a deceleration in their near-term growth. However, we continue to think the long-term picture remains intact as a leader in an attractive industry, providing mission-critical software with highly recurring revenue, 90%+ retention rates, and high returns on capital. The stock price performance has effectively been all P/E multiple compression.”

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.

In another article, we discussed Paycom Software, Inc. (NYSE:PAYC) and shared Oakmark Select Fund’s views on the company. In Q1 2024, Polen Focus Growth Strategy established a new position in Paycom Software, Inc. (NYSE:PAYC). In addition, please check out our hedge fund investor letters Q2 2024 page for more investor letters from hedge funds and other leading investors.

READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.

Disclosure: None. This article is originally published at Insider Monkey.

The $250 Trillion AI Hype is Real. A few years from now, you’ll probably wish you’d bought this stock.

When Jeff Bezos said that one breakthrough technology would shape Amazon’s destiny, even Wall Street’s biggest analysts were caught off guard.

Fast forward a year and Amazon’s new CEO Andy Jassy described generative AI as a “once-in-a-lifetime” technology that is already being used across Amazon to reinvent customer experiences.

At the 8th Future Investment Initiative conference, Elon Musk predicted that by 2040 there would be at least 10 billion humanoid robots, with each priced between $20,000 and $25,000.

Do the math. According to Musk, this technology could be worth $250 trillion by 2040.

Put another way, that’s roughly equal to:

  • 175 Teslas
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  • 140 Metas
  • 84 Googles
  • 65 Microsofts
  • And 55 Nvidias

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  • Bill Gates sees artificial intelligence as the “biggest technological advance in my lifetime,” more transformative than the internet or personal computer, capable of improving healthcare, education, and addressing climate change.
  • Larry Ellison — through Oracle, is spending billions on Nvidia chips and partnering with Cohere to embed generative AI across Oracle’s cloud and apps.
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