Polen Capital: “Paycom (PAYC) is Well-Positioned to Benefit From Digital Transformation”

Polen Capital, an investment management firm, published its “Polen U.S. SMID Company Growth Composite” first quarter 2021 investor letter – a copy of which can be downloaded here. A return of 2.35% was delivered by the fund for the first quarter of 2021, trailing its Russell 2500 Growth benchmark that delivered a 2.49% gain for the same period. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

Polen Capital, in its Q1 2021 investor letter, mentioned Paycom Software, Inc. (NYSE: PAYC), and shared their insights on the company. Paycom Software, Inc. is a Oklahoma City, Oklahoma-based online payroll and human resource technology provider that currently has a $19.8 billion market capitalization. Since the beginning of the year, PAYC delivered a -27.03% return, while its 12-month gains are up by 14.96%. As of May 25, 2021, the stock closed at $330.00 per share.

Here is what Polen Capital has to say about Paycom Software, Inc. in its Q1 2021 investor letter:

Paycom is a cloud-based SaaS provider for human capital management. Its simple yet innovative single-instance software initially targeted small and mid-size businesses, and it is being adopted widely. The company has a highly repeatable sales process driven by more than 90% customer retention and a solid track record for selling more to existing customers while acquiring new users. We also like Paycom’s founder/CEO and his impressive track record for value-creating reinvestment. Despite the challenges created by the pandemic, revenue grew 14% in the fourth quarter and for 2020. Additionally, we believe Paycom is well-positioned to benefit from digital transformation as more corporate functions move to the cloud.”


Our calculations show that Paycom Software, Inc. (NYSE: PAYC) does not belong in our list of the 30 Most Popular Stocks Among Hedge Funds. As of the end of the first quarter of 2021, Paycom Software, Inc. was in 46 hedge fund portfolios, compared to 35 funds in the fourth quarter of 2020. PAYC delivered a -14.72% return in the past 3 months.

The top 10 stocks among hedge funds returned 231.2% between 2015 and 2020, and outperformed the S&P 500 Index ETFs by more than 126 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Here you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

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