Hedge Funds Are Selling Paycom Software Inc (PAYC)

Now that we’ve mentioned the most bullish investors, let’s also take a look at some funds that got rid of their entire stakes in Paycom Software Inc (NYSE:PAYC) during the third quarter. Interestingly, John Croghan and Richard Fradin’s Rail-Splitter Capital Management unloaded biggest stake of the “upper crust” of funds tracked by Insider Monkey, worth an estimated $9.2 million in stock, and Paul Marshall and Ian Wace’s Marshall Wace LLP was right behind this move, as the fund dumped about $3.9 million worth of shares.

Let’s now take a look at hedge fund activity in other stocks similar to Paycom Software Inc (NYSE:PAYC). We will take a look at InterXion Holding NV (NYSE:INXN), Nu Skin Enterprises, Inc. (NYSE:NUS), Ryman Hospitality Properties, Inc. (REIT) (NYSE:RHP), and WPX Energy Inc (NYSE:WPX). This group of stocks’ market values are closest to PAYC’s market value.

As you can see these stocks had an average of 28 hedge funds with bullish positions and the average amount invested in these stocks was $541 million. That figure was $135 million in PAYC’s case. InterXion Holding NV (NYSE:INXN) is the most popular stock in this table. On the other hand Ryman Hospitality Properties, Inc. (REIT) (NYSE:RHP) is the least popular one with only 18 bullish hedge fund positions. Compared to these stocks Paycom Software Inc (NYSE:PAYC) is even less popular than RHP. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.

Disclosure: none.