5 Best Human Resources Stocks To Buy Today

2. Workday, Inc. (NASDAQ:WDAY)

Number of Hedge Fund Holders: 86

Workday, Inc. (NASDAQ:WDAY) is an international provider of cloud-based solutions to a plethora of business needs, stretching from financial management to human resource management. Be it managing receivables or payables, implementing internal controls, or streamlining supplier engagement, Workday, Inc. (NASDAQ:WDAY) enables an ecosystem for cross-sectional teams to increase productivity. In June 2023, the company saw an increase in share price following RBC Capital Markets’ coverage for the stock. Analyst Rishi Jaluria expects the company to grow up to 20% in the coming years, given how its platform is replacing conventional solutions. With AI improving, the market is expected to grow for such platforms, added the analyst. 

According to Insider Monkey’s first quarter database, a total of 86 hedge funds were bullish on Workday, Inc. (NASDAQ:WDAY), as opposed to 83 funds in the prior quarter. Stephen Mandel’s Lone Pine Capital held the largest position in the company, with 4.2 million shares worth over $881 million.

This is what RiverPark Large Growth Fund has to say about Workday, Inc. (NYSE:WDAY) in its Q3 2022 investor letter:

“We also added a small position in Workday this quarter, taking advantage of its 2022 price decline. WDAY is a leading SaaS software solutions provider with two key subparts: Workday HCM offering end-to-end software for human resource departments, and Workday Financial Management for planning, spending, auditing, analytics, and reporting. The company sells to more than 9,500 medium-sized through enterprise customers across more than 175 countries, including more than 50% of the Fortune 500.

The company is benefitting from the secular shift to digitization for businesses and despite its 21% annual subscription revenue CAGR over the past 2 years (with 95%+ gross revenue retention), Workday still has less than 5% penetration of its $105 billion TAM. We believe the company can grow its top-line high-teens over the long-term, while continuing to improve margins (non-GAAP gross operating margin expanded 900 basis points to 22.4% over the past two years), leading to approximately 30% EPS growth for the foreseeable future. The company also requires limited capital expenditures, producing significant and growing FCF ($1.4b last year, up 37% year over year), which WDAY has used for acquisitions and debt repayment.”