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Here are the Reasons to Invest in Paycom Software (PAYC)

Polen Capital, an investment management company, released its “Polen Focus Growth Strategy” first quarter 2024 investor letter. A copy of the same can be downloaded here. The US stock market started 2024 optimistically. In the first quarter, the fund returned 8.29% (gross) and 8.09% (net) compared to 11.41% for the Russell 1000 Growth Index and 10.56% for the S&P 500 Index. In addition, please check the fund’s top five holdings to know its best picks in 2024.

Polen Focus Growth Strategy featured stocks like Paycom Software, Inc. (NYSE:PAYC) in the Q1 2024 investor letter. Headquartered in Oklahoma City, Oklahoma, Paycom Software, Inc. (NYSE:PAYC) is a cloud-based human capital management solution provider.  On April 18, 2024, Paycom Software, Inc. (NYSE:PAYC) stock closed at $184.87 per share. One-month return of Paycom Software, Inc. (NYSE:PAYC) was -3.14%, and its shares lost 37.91% of their value over the last 52 weeks. Paycom Software, Inc. (NYSE:PAYC) has a market capitalization of $10.865 billion.

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

“We purchased a new position inPaycom Software, Inc. (NYSE:PAYC), a payroll and human capital management (HCM) software company. Paycom manages payroll for over 20,000 companies that employ approximately 7 million people. It focuses on mid-market customers and holds a top-three position as a payroll provider for firms with less than 10,000 employees, behind ADP but roughly equal to UKG based on employee penetration. The company has high recurring revenue, above 90%, and has been adept at cross[1]selling HCM software to its payroll customers for years. The company has organically built a cloud-native platform where each HCM offering is tightly integrated, not a patchwork of built and bought offerings like most of its peers.

Revenue growth exceeded 20% for years before a self-inflicted wound last year caused a slowdown in cross-selling. In short, Paycom asked its customer relations representatives to pivot their cross-selling efforts to the newer payroll offering, Beti, which caused significant disruption in the company’s selling motion. Management realized its mistake and is back to its normal cross-selling activity, allowing customers to upgrade to Beti when ready. We expect Paycom to grow its revenues and earnings at a high-teens or better rate over the next five years from a combination of new clients and increasing revenue per client. Both have been equal contributors to revenue growth in the past.”

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 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 previously discussed Paycom Software, Inc. (NYSE:PAYC) in another article, where we shared Alger Mid Cap Growth Fund’s views on the company. In addition, please check out our hedge fund investor letters Q1 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.

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

Dr. Inan Dogan

Dr. Ian Dogan

Co-Founder and Research Director at Insider Monkey

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
  • 107 Amazons
  • 140 Metas
  • 84 Googles
  • 65 Microsofts
  • And 55 Nvidias

And here’s the wild part — this $250 trillion wave isn’t tied to one company, but to an entire ecosystem of AI innovators set to reshape the global economy.

It’s a leap so massive, it could reshape how businesses, governments, and consumers operate worldwide.

Even if that $250 trillion figure sounds ambitious, major firms like PwC and McKinsey still see AI unlocking multi-trillion-dollar potential.

How could anything be worth that much?

The answer lies in a breakthrough so powerful it’s redefining how humanity works, learns, and creates.

And this breakthrough has already set off a frenzy among hedge funds and Wall Street’s top investors.

What most investors don’t realize is that one under-owned company holds the key to this $250 trillion revolution.

In fact, Verge argues this company’s supercheap AI technology should concern rivals.

Before I reveal the details, let’s talk about how some of the richest people on the planet are positioning themselves.

  • 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.
  • Warren Buffett — not known for tech hype — says this breakthrough could have a ‘hugely beneficial social impact.

When billionaires from Silicon Valley to Wall Street line up behind the same idea — you know it’s worth paying attention to.

Even as we admire what Tesla, Nvidia, Alphabet, and Microsoft have built, we believe an even greater opportunity lies elsewhere…

But the real story isn’t Nvidia — it’s a much smaller company quietly improving the critical technology that makes this entire revolution possible.

And judging by what I’m hearing from both Silicon Valley insiders and Wall Street veterans…

This prediction might not be bold at all:

A few years from now, you’ll wish you’d owned this stock.

The best part? You can discover everything about this company and its groundbreaking technology right now.

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Wall Street calls this $3 stock a “Melting Ice Cube.” They said the same thing about BTI before it returned 90%.

Dr. Inan Dogan

Dr. Ian Dogan

Co-Founder and Research Director at Insider Monkey

My name is Inan Dogan. I’m the co-founder and Research Director of Insider Monkey. I have an important message for you today.

Since March 2017, my stock picks have returned 16.5% annually. Today, I’ve found an opportunity even bigger than my British American Tobacco call.

Two years ago, Wall Street wrote off British American Tobacco (BTI) as a “melting ice cube.” The stock had crashed 40% from its peak, and consensus said the business was dying.

We looked under the cover and realized they were wrong.

We alerted our subscribers, and BTI returned 90% in just 16 months.

Now if you had invested just $10,000 in BTI in June 2024, you’d be sitting on $19,000 in October 2025.

Today, we have identified a nearly identical pattern in a digital-first giant trading at $3.

While the market panics over a surface-level revenue decline, our PhD-led research shows management has actually surgically cut $100 million in waste to focus on high-margin growth.

This pattern is a hallmark of our 16.5% annual return track record. The current opportunity offers a 400% upside potential—dwarfing even our 90% BTI return.

Get the ticker for our new “Underdog” pick and the full BTI case study for just 99 cents.

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